In addition, 70 per cent of firms wholly rely on multiple disparate databases, while 37 per cent lack the necessary resources to support existing systems, resulting in software that is not kept up to date, the study claimed.
The research study, Strategic Change in IT, was based on interviews with 100 IT managers in mid-sized and large UK companies in order to pinpoint their views on the changing nature of IT in their sector.
According to Thomas Coles, managing director at MSM Software, the study revealed a significant gap between financial services firms’ IT requirements and their current arrangements. He said: “Financial services organisations are gambling on the capabilities of their current software and the disparate systems at their disposal, and this must change. In today’s challenging climate, the quality and efficiency of IT is more critical to business success than ever before.”
According to Mr Coles, the statistics show how imperative it is that businesses understand the efficiency of their existing software, and suggests that this can be achieved through technical audits or system health checks, which provide vital insight into how to improve performance.
He added: “It’s no surprise that so many financial services organisations fail to correctly manage their critical business information, or maintain software with such limited IT support available. To address this, firms must carefully consider what resources are required to ensure that data is being managed acceptably, and systems are fully supported and can operate at an optimum level.”
Some options to achieve this include fresh resourcing strategies, such as outsourcing the IT function, or ‘body shopping’ where a firm loans the technical expertise of an organisation’s employee. These approaches can prove essential to ensuring the quality and efficiency of business.
Key points:
•A lack of investment in software is leading to an increased risk profile for financial services firms.
•Multiple systems and a reliance on out-of-date software are the key issues.
•Greater support for existing IT is needed, which may involve fresh resourcing strategies.
Adviser comment:
Simon Webster, managing director of Facts & Figures Financial Planners Limited, said: “Financial advice is hugely complex and the software to support that advice is also extremely complex, out of necessity. Many competent advisers know their jobs but not IT; nor do they have any idea what IT can do for their businesses. Even if they did, implementation would still be challenging. Any software purchased on a one-off basis would have been out of date from 1 January 2013 with the advent of adviser charging. Many advisers think that a complex back-office system is too much trouble or too restrictive to bother with.”
