Today's complex IT environments may cause disruptions in the provision of services by financial institutions. Reducing IT system complexity will improve the availability of services and the quality of data reports. It also offers institutions an opportunity to reduce costs and to adjust more easily to technological developments and changing business demands.
Several disruptions in the services provided by large banks gave us cause to launch an examination into the management of risks related to very complex IT environments. The examination was held in 2015 and early 2016. We came to the following conclusions.
- Most financial institutions examined sufficiently manage the risks inherent to complex IT environments,
- Although the institutions acknowledge that reducing IT complexity will reduce the number of disruptions, they mention cost savings and adaptability as their main motives for reducing IT complexity.
- Contrary to the outcome of our 2014 thematic examination, insurance companies now generally appear to manage IT complexity issues better than banks. Insurers seem to be focusing more on cost control – which means that reducing IT complexity is more urgent for them.
- IT environments are still more complex than we would like to see. This is why the complexity issue is still high on the institutions' agendas.
We developed the assessment framework for this examination based on our findings from previous thematic examinations. We will use the same framework for targeted examinations this year at banks, insurance companies and pension funds. To access the framework, go to DNB's Open Book on Supervision.