One in three UK financial institutions are lagging behind in their integration with partners and suppliers, resulting in a spate of high-profile IT failures, according to a new study by analyst firm Freeform Dynamics.
In a survey of 120 mid-to large-sized companies in the UK, over a third (35%) of the 24 financial institutions that responded were aware that they are “bottom tier” business-to-business (B2B) integration performers – meaning that they are in the bottom third of the sample.
Moreover, that same third of financial institutions have “no current intention to drive improvement,” according to the survey.
Automating the way a business connects, communicates and transacts across global supply and demand chains can have a massive impact on the overall cost of doing business, according to Liaison Technologies, which commissioned the report.
Recent data integration failures between the Royal Bank of Scotland and Santander, and the Bank of Scotland and Halifax, have highlighted the risks of inadequate integration.
Most recently, the Bank of Scotland was fined £4.2 million by the Financial Services Authority for failing to keep accurate records of the mortgage payments of 250,000 Halifax customers.
According to the FSA, it was a result of a failed integration of the bank’s mortgage records system and its mortgage offer letters system, together with manual updates which were not always carried out.
“There is a huge question mark over who takes responsibility for data in many organisations, and this is a classic example of where such complacency can have a catastrophic impact on both profitability and reputations,” said Mikko Soirola VP of Liaison Technologies.
According to the survey, 38% of bottom tier performers believe that lack of clear ownership and support at management level is the problem, while 48% believe that lack of B2B integration skills and knowledge is an underlying issue.
“Decades of relying on bespoke solutions have conditioned many to accept high costs and inflexibility as norm, especially when large managed service firms are in the mix,” said Dale Vile, research director at Freeform Dynamics.
“It’s clear from our study that the shortcomings of B2B solution providers have played a significant part in perpetuating the low levels of integration we see among UK businesses.”