Compliance, "Basel II" far beyond the cost of IT personnel budget, but it is difficult to return for additional investment in additional benefits.
According to a recent interview the users and analysts said several of the nation's largest banks proved to strengthen the business risk control requirements of an international law far exceeds the cost of IT personnel is expected.Accenture last month released a survey of major U.S. banks and found that many banks invested large sums of money to comply with the "Basel II."Most respondents said they are worried: "Basel II" stringent conditions on the bank's capital position is not only a slight improvement or no improvement.
The new "Basel Capital Accord" or "Basel II" framework will provide: the United States about 20 largest banks to use IT systems to assess the credit and operational risks, to ensure that they have enough capital on hand to cover the risk.Regulatory requirements: By 2007, all European banks and U.S. banks to strengthen the integration of several of the largest back-office systems, the use of more advanced risk management tools to reduce operational and credit risk for the cover and stay out of the capital.Other U.S. banks compliance with the agreement to take the voluntary principle.
Where financial services companies declined to disclose the name of the security management analyst, said Adam Stone, the banking sector leader of the "Basel II" cost estimate was optimistic that the implementation of the agreement may reduce the risk.He said: "The bank's only now to find out how much this would cost, began to yell."
Stone believes that in the next decade, regulators will force the "Basel II" gradually implemented in all the major U.S. banks, and the implementation of the insurance company.Stone said: "This will be the natural evolution process. First, large banks and small and medium sized banks, followed by credit unions. The insurance industry, regulators also have been paying attention," Basel II "."
Headquartered in Basel, Switzerland Bank for International Settlements (BIS) is a company designed to promote international monetary and financial cooperation in the organization, responsible for the formulation and implementation of "Basel II" standard.From the IT point of view, the proposal requires banks to take measures, such as the development of risk management, rule-based engine, the customer database across the entire enterprise together.However, according to the user and the research company claims, the difficulty of compliance with the agreement larger than expected, but also slower than expected progress.
Johannesburg, South Africa's Standard Bank Group Limited Risk Management Group, Campbell said: "The challenge is," Basel II "has not yet determined the actual demand. You have to be some assumptions, for instance, with the risk calculation tool. "implementation of the bank," Basel II "for three years and is now the issuing system, the security management system, risk and debt limit loss of data management systems and system improvements.Campbell said the bank is also implementing a new capital Estimator.
According to Accenture's survey, interviewed nearly half of the 66 banks in the bank's director, said they estimated that by 2007, for compliance, "Basel II" will spend more than 61 million U.S. dollars;Accenture in 2004 for the "Basel II" in a similar survey conducted for this to answer the charge of only 23%.
According to Needham, Massachusetts, the Towergroup that by 2008, the United States the full implementation of all the bank's risk management program will cost about 12 billion U.S. dollars.The "Basel II" which will account for 42 billion U.S. dollars.
Accenture is responsible for managing risk and regulatory partner Wilson said: "We expect 50% to 70% of the cost and IT related. I think people underestimate the agreement on the impact of business processes and organization." Wilson that, to accurately calculate the business risk, IT organizations need to build an accurate data model, and to collect large amounts of data, banks must set aside capital to cover this risk.
Wilson said, IT managers can expect to their environment will be affected by several aspects.For example, they will have more data to preserve and maintain a longer period of time, the standard uniform data collection system and to promote more advanced analysis tools and predictive analysis tools.(Shen Jian Miao compilation)
"Basel II" problems
Accenture survey by the big banks, found the following facts:
● Compliance "Basel II" the difficulty is greater than expected;
● progress in compliance with the agreement to be slower than expected;
● Compared with last year's estimates, the bankers for compliance, "Basel II" many per cent more funds;
● Nearly half of the surveyed banks plan to increase spending in order to obtain compliance with the agreement other than the benefits;
● 79% of respondents said they expected to "Basel II" capital position is not only a slight improvement or no improvement.