Stamford, Conn. (April 23, 2003) - In 2003, 42 percent of large financial services providers plan to spend between $500,000 and $2.5 million on IT for risk management, accounting for up to 9.2 percent or more of the average 2003 IT budget, according to a survey by Gartner Inc.
New regulations, market volatility and heightened exposure are forcing financial services providers to place increased focus on risk management.
Gartner conducted the survey during November and December 2002 via phone interviews.
In 2003, primary responsibilities for risk management strategies have shifted from individual departments to the corporate level. Centralized approaches to the management of risk data and associated technologies have been transferred to top executives to enable consistent and cost-effective IT support of risk initiatives.
According to Gartner, the implementation of enterprise-level approaches to risk management are being driven by three factors:
1. Key legislative and regulatory initiatives are providing pressure such as the Sarbanes-Oxley Act of 2002, the USA PATRIOT Act of 2001, the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, and the New Basel Capital Accord (Basel II).
2. Increased concern is being applied as a result of more complex internal and external interdependencies, such as new business partnering models, more diverse product and service portfolios, and multicultural markets and operations.
3. Market volatility, with turbulence in worldwide financial markets, is forcing financial services decision-makers to take a more proactive and holistic view of their vulnerabilities and opportunities.
-- WebCPA staff
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