3 December 2003

With Capital Markets coming under increasing scrutiny, the view of compliance simply as a cost burden needs to end, says specialist IT consultancy, Detica. Good compliance should be indivisible from good business practice, if Capital Market organisations are to continue to retain customer confidence.

According to Paul Stokes, Detica's Head of Capital Markets, compliance and accountability are two of the most urgent strategic challenges facing this sector today: "Capital Markets in particular, encompassing investment banks, brokerages and asset managers, are experiencing increased external scrutiny. This is being driven by a number of pressure factors: Sarbanes-Oxley, Basel II, the threat of fines or even imprisonment for senior officers, the requirement to uncover insider fraud and money laundering activities, as well as the risk of unintentional compliance violations."

One of the biggest risk areas of compliance is also one of the hardest to monitor - the shifting world of unstructured data, such as e-mails, instant messages and phone calls. This represents a significant challenge as the volume of data involved for Capital Market organisations is often huge, given the amount of communications taking place each day. Tracking this type of data is also not easy using traditional IT approaches, which are usually designed to manage well-structured data.

Stokes advocates a pragmatic approach to the problem, but stresses the need to move quickly: "Simply put, organisations which do nothing face large fines and serious damage to their reputations if compliance violations occur.

"The silver lining here is that most companies already have the necessary technology - such as search and retrieval, workflow and document management - within their organisations which they can use to begin meeting compliance requirements. It's a case of auditing what's needed, what's actually there and what needs to be done to bridge the gaps in the most cost-effective manner - but start doing it now!"

Nick Miles Text 100 Public Relations Tel: +44 (0)208 846 0700 email: