A flurry of regulatory mandates is adding structural cost and most banks have been adopting a tactical approach to compliance, leading to fragmented control processes and technologies.
TowerGroup estimates that the financial services industry will spend nearly $320bn on compliance this year. As a result, vendors of enterprise risk management (ERM) technologies will have the opportunity to introduce a layered framework of policies, processes, IT solutions and IT infrastructure. By combining efforts in a broader ERM architecture, banks may ease their compliance burden and improve business value. Typical ERM implementation strategies are staggered and hinge on integrating enterprise data or reporting.
Guillermo Kopp is vice-president of financial services strategies and IT investments at TowerGroup.
