The Financial Conduct Authority released findings from its cross-Financial Services change management review which looked at how financial firms manage technology change, the impact of change failures and the practices utilized within the industry to help reduce the impact of incidents resulting from change management.
A number of significant IT failures in the last 10 years have led to greater scrutiny of the effectiveness of technology change management in the financial services (FS) sector. Technology is integral to the delivery of FS and while technology change presents firms with the opportunity to innovate, lower costs and improve the quality of service, it also introduces operational risks.
Analysis of the incident data firms report to the FCA shows that change-related incidents are consistently one of the top causes of failure and operational disruption. Nearly 1,000 material incidents were reported to the FCA in 2019, 17% of which were attributed to change activity.
By reviewing how financial firms implement technology change and the effect that outages have on consumers and the financial system, the FCA aimed to understand how firms currently approach managing technology change and the causes of the problems they encounter.
Analysis and key findings in the report are on the following areas:
- contributing practices to change success and change failure
- the impact of incidents caused by technology change
- how firms govern and manage technology change
- how firms build and deploy technology change
- how infrastructure impacts technology change
The review is relevant for all FS organizations and may also be of interest to third parties providing technology services to the industry. As firms are increasingly using remote and flexible working, it is critically important for firms to understand the services they provide, how change activity can impact those services and invest in their resilience to protect themselves, consumers and the market.