90% of Financial CxOs Express Concerns

More than 90% of financial CIOs are worried that a lack of in-depth visiblity and understanding of their legacy assets -- and how to plug them into today's technologies is hurting their business. High costs, uncertain compliance, and lengthy time-to-deployments are all pain points, a recent survey says. Learn what 60 top global financial managers are doing about their concerns, and how their efforts will affect architecture and development projects.

by Vance McCarthy

Tags: Governance, Compliance, Legacy, Financial Sector, Execs, Complexity, Survey,



More than 90% of financial CIOs are worried that a lack of in-depth visiblity and understanding of their legacy assets -- and how to plug them into today's technologies is hurting their business. High costs, uncertain compliance, and lengthy time-to-deployments are all pain points, a recent survey says.

In its "Cost of Complexity Survey 2005," HAL Knowledge Solutions said financial services IT execs are thwarted by 'Black Holes' "complexities" in meeting IT governance.

Key findings from the survey include:
  • 59% of respondents agree that IT governance is impossible without full visibility of all legacy applications code and systems;
  • On average, financial IT execs say only 40% of the applications portfolio of financial sector firms is visible for constructive analysis;
  • 60% of respondents believe that this lack of visibility also presents compliance challenges, and a similar number see the need for audit capability growing due to
    regulatory pressure;
  • 65% of businesses state that complexity makes auditing unfeasible in areas of legacy architecture

    More than one-third of financial sector organisations "are still struggling to meet regulatory [compliance] standards," such as Basel II and Sarbanes-Oxley, the HAL survey of financial execs found. Further, these execs said the complexity of legacy applications is the major IT factor in the failure to comply.

    The study raised two important issues, HAL researchers said:

  • While financial sector IT departments have a clear understanding and commitment to developing IT governance strategies, (70% of financial IT execs said they had established an internal management committee, and 68% said they saw IT governance as a "high" priority), they cannot implement effective governance programs without a clear view of their legacy code.
  • The major compliance issue facing IT professionals in the financial sector today is the complexity of their IT systems, and the corresponding need to audit and control them. However, as the research shows, organisations are struggling with this issue, and many see the lack of transparency as a costly and difficult problem to solve.

    "Such poor levels of application visibility undermine any attempts to create valid auditing or quality improvement processes, presenting immediate exposure to corporate risk for IT departments from internal and external bodies," Mark Kusionowicz, VP Marketing at Hal Knowledge Solutions, said. He cited outsourcing as an example of where poor visibility can complicate compliance.

    With Outsourcing high on the ' to do' list, the survey states that outsourcing accountability is the primary driver for IT governance in the sector. However, if an institution only understands 40 percent of its applications code, it is impossible to tell which code is business critical, and which is simply redundant. This eliminates the ability to correctly assess the operational cost of IT, reducing the ability to develop accurate and achievable support metrics and SLA's (Service Level Agreements) with outsource partners, or for internal charge-back programs, Kusionowicz added.


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