Banks to spend £1bn on IT to improve reporting
The nation's banks may have to stump up nearly £1 billion to improve their IT systems, under new guidance published yesterday.
A report from the Financial Services Authority (FSA) estimated that £891.8 million will need to be spent over five years to ensure that depositors are able to retrieve their savings quickly if a lender is in trouble.
According to the FSA, the improvement to the systems will mean banks can create a document showing all deposits made within two days of the firm collapsing.
The announcement is part of wider measures to improve the Financial Services Compensation Scheme, which means that depositors' savings of up to £50,000 will be guaranteed if a bank goes under.
'Firms' obligations to tell customers about the FSCS scheme, along with telling customers which trade names are covered by a particular authorisation, would have estimated set up costs of £34.6m and ongoing annual maintenance costs of £4.2m,' the FSA added.
The issue has come to the forefront of late as the financial crisis has continued.
Source - BCS