The UK retail banking sector is facing a #1bn IT gamble on the euro under the Government’s new National Changeover Plan, it is claimed. Changeover timetables unveiled by Prime Minister Tony Blair will leave the sector with little option but to invest half of the total of up to #4bn required to carry out euro conversion before knowing when or even whether the UK is to join.
At least half of that #2bn is likely to go on IT spend, according to John Turner, knowledge principal at banking consultancy TCA. Retail banks will need to be ready to handle volume euro business at least a year before the switch to euro cash, he believes.
The changeover plan estimates that if entry were in 2001, sterling would disappear by 2004. There would be a 24 to 30 month gap between a referendum and the issue of euro cash. As the banks have estimated a three-year conversion period, they will need to start investing 12 to 18 months before the referendum.
“The banks will have to take that risk; they cannot wait for the referendum,” said Turner. “In business sometimes you have to take a view and spend money you are not certain to get back.”
Neil Jones, head of retail banking at consultancy Mummert, said: “The length of time from decision to the withdrawal of sterling is a maximum of 40 months but it could be significantly less.”
Reiterating calls for more government action to aid UK business to prepare, he said: “This sector will be likely to suffer the highest costs – possibly over a quarter of a billion pounds for a large bank – and there is scant support to embark on the costly programmes that will need to be undertaken.
More than ever the retail banks and building societies will have to be clever in their planning and flexible in their IT response, possibly using new and more rapidly deployable technologies such as introducing web-enabled applications ahead of plan,” he added.
Barclays has partnered with accounting software company Xero to provide businesses with access to transaction data through its direct feed.
Government's estimate of a £400m admin saving from Making Tax Digital is way off - and is instead a huge cost burden, warns Lamont Pridmore chief executive Graham Lamont
Xero unveiled its expanded global partner programme at Xerocon South, the accounting technology conference in Australasia
Accountancy software firm Sage has been hit by a data breach which may have compromised the personal details and bank account details of as many as 300 UK businesses