Peter Stafford, IT director at Bank of Ireland in the UK, manages a 320-strong IT department and a budget of more than £50m.

In December, the bank closed a $600m IT outsourcing contract with HP. It also works with services firm Computacenter.

Stafford revealed to Computing the impact that compliance is having on the business, and how the IT department is learning to cope.

How high does compliance rank against other IT challenges?
Compliance with legal and regulatory frameworks is one of the biggest challenges facing IT departments in the financial services industry.

Increasing regulation means we have to ensure that systems enable compliance while meeting the needs of the business, which can be a tricky balancing act.

Who in your business owns the compliance problem?
Ensuring the organisation is compliant is ultimately the responsibility of our head of compliance.

But for months now people from across the business have been working together to understand the issues, and define and implement solutions to ensure our compliance.

Which legislation will have the most impact on the financial sector?
There are three things that will have a significant impact on the financial services industry.

These are CP186 (mortgage regulation), Basel II and anti-money laundering legislation. All of these will present major challenges for IT departments as we look to develop realistic solutions.

What impact will Basel II have on your organisation, and how are you preparing for its arrival?
Over the past two years we have been enhancing our systems that capture information and monitor credit and operational risk.

We are currently looking at how we further enhance our systems to meet Basel II requirements within the timescales laid down.

How are you educating the IT team about compliance?
There is a senior manager within IT who has specific responsibility for IT risk and compliance. General awareness is given through briefing sessions, monthly communication and the corporate intranet.

More formally we ensure that compliance and risk issues are considered as part of our internal development processes.

Also, key people on specific projects or in business-facing roles receive formal compliance training as given to the frontline staff.

What IT strategies do you feel are key to achieving compliance?
Our investments in documenting data and ensuring its integrity, scalable management information databases and flexible reporting tools have made the task easier, and less expensive.

Similarly investments in imaging and tools that facilitate the extraction of information from systems will make the compliance task easier.

What is the biggest challenge your organisation faces in relation to compliance?
While they all offer challenges, the most immediate is probably mortgage regulation.

By October we need to ensure that we keep adequate records and give compliant mortgage quotes while maintaining our sales capability.