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New banking IT systems could provide boost to contractors

Posted Jan 8, 2009

The Financial Services Authority (FSA) has published a consultation paper setting out proposals for speeding up the payout of compensation to make it possible for customers to get back their money within seven days if a bank fails.

New IT systems to handle quick claims processing could cost nearly £900m, providing a timely boost for financial services IT contractors.

In the event on a banking failure, the FSA's Financial Services Compensation Scheme can take up to 6 weeks to pay out compensation.

The FSA have realised that much faster payouts must be guaranteed in order to restore the public's faith in the banking system.

The industry watchdog suggests that set up and maintenance costs of new IT systems for quick claims processing are estimated at £891.8m over five years.

Having seen how much large public sector IT projects have really ended up costing in recent years, it seems quite possible that the figure could end up being substantially larger than this.

Ironically, given the origins of this recession, this new banking initiative could potentially provide many contractors with new work over the next few years.

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