Swan's bank laws could mean costly IT upgrades

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Swan's bank laws could mean costly IT upgrades

Carbon tax impacts also expected.

Australian Government plans to introduce bank account portability and a carbon tax may require the nation’s banking sector to make significant new IT investments, according to research group Gartner.

The Gillard Government's plan to make switching banks easier will likely mean investment in new applications to support account portability, according to Gartner.

Australian banks could be the first in the world to set up account portability systems, according to Treasurer Wayne Swan.

But the idea has been mulled over in Europe for the past decade, dividing law makers and the banking sector due to the cost of changing IT systems. 

Last year Andrea Leadsom, a law maker from UK prime minister David Cameron's team, said that banking customers should have a lifetime bank account number to overcome the switching problem. 

In February this year Barclays Bank agued that the cost of enabling account portability "would be prohibitive" and ultimately outweigh any benefits.

"Implementing account number portability would require an overhaul of every payment system together with all banks having to change their accounting systems and delivery channels," it argued. 

Forced upgrades

In a new report, Gartner examined a series of government proposals that may impact banking IT systems across the Asia Pacific region. 

While Australia’s carbon tax debate is yet to be settled, should it proceed, banks will likely be forced to “overhaul and upgrade” high-emission data centres and operations, according to Gartner. 

“It is estimated that data centres across the world currently account for 1.5 percent of all emissions, a level on par with the airline industry," the analyst firm noted.

The significant level of emissions is swaying IT professionals to consider investing in low-power consumption devices and tools, to pre-emptively address raised power costs following the carbon tax".

Similar changes to the IT operations of New Zealand’s banks were expected, the largest four of which were owned by Australian banks anyway. 

The Federal Government’s proposals to improve mortgage and credit card transparency would result in multiple business process changes, which could translate into technology upgrades, the analyst firm notes. 

The new rules would compel financial institutions to explain to credit card customers how long it would take to paid down a credit card on minimum monthly repayments, affecting CRM systems and reporting tools, as well as credit risk analysis systems. 

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