Information Technology (IT) is incredibly important in any modern industry. It is especially important in financial services, which is responsible for more than a fifth of the world's total IT expenditure.
However, all that spending isn't necessarily paying off. Because banks were among the first to adopt computers, old technology is still in place. Switches to new systems become more and more complex as banks grow, so employees may be left with different numbers from different systems and things that just don't add up.
Was this a factor in the current financial crisis? Possibly. It was very difficult for banks to determine risk. Whether managers would have paid attention even if they had known the true risk will never be known, but it is clear that banks need to spend the money to develop integrated systems in the very near future.
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