With little over two years to go until E-day over half the banks in Europe have yet to thrash out a strategy for the European Monetary Union (EMU).
Out of 205 banks surveyed by IDC, 54 per cent did not have a strategy while only 15 per cent had allocated a budget to make changes to IT systems and business processes.
?Most banks are taking excessive risks in delaying the commitment of management and financial resources to preparing for EMU,? warned Colin Stringer, writing in 'Chartered Banker', the official publication of the Chartered Institute of Bankers. He is managing counsultant at Cap Gemini, which commissioned the survey.
He blamed the delay on the uncertain political climate and banks believing the investment needed is relatively minor. ?The survey shows that banks have not fully appreciated the strain the transition process will place on IT resources, both in-house and external,? writes Stringer.
Stringer emphasised the transition is far more complicated than adapting software for the millennium date change. This is because EMU throws up many business opportunities that are currently difficult to define, whereas Year 2000 projects are all about rescuing systems from crashing after the millennium and complying to a standard way of writing dates.
Cap Gemini advises banks to take a 'top-down' and a 'bottom-up' assessment of EMU?s impact on systems because many of the activities affected, such as payments, cut across every area of banking. ?A common mistake of impact assessment is concentrating on minimising risks. Banks should make an equal effort to identify potential opportunities,? continued Stringer.
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