The recent high-profile collapse of Ulster Bank’s IT systems has impaired the overall confidence of people’s trust in the IT systems of financial institutions and the Innovation Value Institute (IVI) has called for the establishment of an international standard to certify banks’ IT platforms.
The IVI, an Enterprise Ireland and IDA-supported technology centre at NUI Maynooth, says such a standard would help to restore trust and confidence in the banking profession.
“Organisations that have a greater risk associated with IT dependency naturally need to be operating at a higher level of capability maturity,” the IVI’s general manager Martin Delaney explained.
“Banks are extremely complex organisations and have a high degree of exposure. For example, where IT services are outsourced, a company needs to be able to measure and be comfortable with the capability of the outsourcing system operator. An international standard will greatly increase confidence in this area,” Delaney suggested.
Why banks are increasingly exposed to IT failure
Banks, in particular, are at greater risk of exposure to IT debacles for a variety of reasons, including the impact of mergers and acquisitions, the focus on cost reduction and outsourcing, consumer demand for 24-hour access and access via internet and smartphones, and the need to force legacy systems to work compatibly with newer systems.
The IVI has completed capability maturity assessments across 80 leading global organisations, including 10 of the Fortune 50 companies.
Financial services companies tend to score higher than the industry benchmark on the five-level maturity framework.
“The gap is slight, however, at around 2.6 versus an average of 2.3 but financial-sector CIOs tell us they believe they need to be operating at around 3.5 or higher because of the exposures they face,” said Martin Curley, Intel vice-president, director of Intel Labs Europe and founder of the IVI.