IT will have to assume a major workload increase to satisfy new government regulations expected to emerge next year in response to the current financial turmoil, analysts and industry experts said. "The last two tsunamis to hit IT, the Patriot Act and Sarbanes-Oxley, required companies to know their customers and to know themselves and their [own] finances," says Acquire Media CEO Larry Rafsky. "Now, the upcoming regulations will say, 'Know your customers' finances.'"
There is a call for greater transparency in the linkage between companies and what they trade, and Rafsky says this consequently mandates more use of auditing and tracking applications and their underlying business processes.
Sybase's Sinan Baskan predicts the emergence of regulatory reporting requirements with tighter scrutiny and a higher degree of detail than what is currently required, while IT organizations at brokerage houses will need to "reconstruct the transaction cycle" because the new regulations will attempt to coerce financial providers to prioritize clients' interests by guaranteeing that pricing reflects actual value. Baskan says the new requirements should be applicable to all transactions in financial and retail accounts, which will enlarge IT's workload.
The emergence of global or at least multinational regulations will likely raise the cost of compliance for IT, but Software AG's David Wright says that IT will not be given additional funding. "They will have to take [the money] from existing budgets unless they can produce a return on investment and business case based on consolidation and rationalization," he says.
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