TowerGroup estimates that total IT spending on compliance reporting in the global financial services industry will reach nearly $1bn in 2004 and should rise to $1.7bn in 2006.
For institutions that regard regulatory reporting mandates like Sarbanes-Oxley (SOX) in the US and Basel II globally as mere compliance issues, technology reporting tools will represent less than 10% of their total increase in compliance costs. The industry can expect up to 35% higher auditing costs, up to 15% higher legal fees and huge internal auditing expenses.
Leading institutions are taking a strategic look at compliance. They are making holistic investments in savvy enterprise IT solutions that streamline operational processes for improved efficiency and competitive advantage.
Virginia Garcia is a senior analyst in the Financial Services Strategies & IT Investments practice at TowerGroup (vgarcia@towergroup.com)
