02 October 2014

Bank spending on legal entity data management set to soar - Aite

17 May 2012  |  5762 views  |  1 Financial numbers

Bank spending on legal entity data management is expected to reach approximately $197.5 million by 2015, according to figures compiled by analyst house Aite.

The Aite report - based on a January to April 2012 online survey and interviews with individuals responsible for legal entity data management at 23 financial institutions on the buy- and sell-side - says regulatory pressure following the 2008 financial crisis has forced banks to reconsider their counterparty risk exposure assessment capabilities.

And industry moves towards the adoption of a new standard for identifying legal entities for regulatory reporting purposes has pushed the issue firmly up the agenda.

From a $77.6 million spend in 2010, the analyst house expects the annual industry outlay to rise exponentially over the coming years, peaking at $197.5 million in 2015.

Virginie O'Shea, Aite Group analyst, says: "Legal entity data management teams will appear in firms that currently lack such a function, and technology spending to further automate the space will gradually rise. One tier-one sell-side firm noted that its spending on legal entity data has risen 100% over the last five years, and we expect many more firms to engage in similar levels of investment."

Comments: (1)

A Finextra member | 17 May, 2012, 08:25

These figures look modest and will be much much higher. LEI has wide industry benefits and impacts and will probably create a doubling up of costs as most banks will need to run legacy numbering along with new and have transformation technology. The architecture to handle all this will be very expensive and need some legacy replacement as well. If banks could do all this for $197.5m it looks cheap

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