Spending on STP and Front-to-Back End Integration Delayed By Financial Institutions in Western Europe, Says IDC

MILAN – OCTOBER 15, 2002 – Although Straight-Through-Processing (STP) and front-to-back end integration are among the highest IT priorities of Western European financial institutions, current market and economic conditions are limiting investments in these projects. According to IDC, several major inhibitors, such as project complexity and the size of the investments required, are inhibiting the major drivers that have been leading IT spending in this area.

 

"Financial companies are less eager to become involved in long and difficult projects, and as in other areas, are delaying all investments that do not show a measurable payback. Nevertheless, all major initiatives set up recently to reach greater interoperability are continuing," said Daniele Bonfanti, Program Manager with IDC's European Vertical Markets group.

The launch of ISO 15022 as a new messaging standard and the commitment of SWIFT to create a common repository for all the financial XML vocabularies is helping to create widely accepted standards facilitating these processes. In addition, Web services have received major attention in the financial services industry but these technologies are still in their infancy and do not represent a viable solution for STP and front-to-back end integration in the short term.

In general, IDC expects that financial institutions will follow a pragmatic approach to internal and external integration, investing mainly in some specific solutions enhancing integration in back-office processes.

IDC's study, Front-to-Back End Integration and STP in the European Financial Services Sector (IDC # PF29J), illustrates the drivers and inhibitors of future STP evolution and describes selected initiatives supporting STP services and solutions.

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