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Lloyds TSB Tech Failures Show Lack of Investment in IT Throughout Industry

By 13 Jan, 2011June 6th, 2017News

Operational Risk & Regulation

Mark Sands looks at recent IT failures at financial institutions, focusing on a variety of reasons that might be responsible for a potential growing trend. GreySpark initially puts forward the idea that a rise in IT failures may reflect a lack of investment in technical infrastructure throughout the financial services industry. The firm maintains that during an economic crisis, it is often common for banks to divert funds that would be used to keep up back-office systems, to more profitable areas of the bank. GreySpark identifies the challenges that institutions face in times of greater fiscal strain, highlighting the need to invest in the more lucrative parts of the business, and to cut costs in other areas. By moving their IT infrastructure to offshoring hubs, financial firms can save costs, however this needs to be managed correctly and within a realistic time frame; done too quickly, this can occasionally cause difficulties during the offshoring process. While the financial markets continue to move cyclically, trends like this will inevitably recur. GreySpark is of the impression that greater IT investment will appear again as profitability picks-up, however this will be reassessed, with infrastructure again being scrutinised, during bearish times.

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