October 21, 2011 - Data latency and incoming regulation are the two toughest technology challenges for banks, a survey has revealed. Sybase's research showed that an equal number of respondents believed that these concerns will take up the largest proportion of their firm's technology budget over the next three years.

Neil McGovern, senior director of marketing at Sybase, said that the highlighting of data latency as an area of investment is indicative of greater optimism returning to the market place.

"Wall Street and the City of London oscillate between downturn and profit chasing - and it is safe to say between 2002 and 2007 the financial services sector had its foot on the accelerator with the profit chasing of the equation receiving all the attention.

"We then had a fright in 2008 when the industry thought it was going to go under. However, now the mood seems to be swinging back," he explained.

Additionally, the survey showed that almost all participants were either not at all confident or only slightly confident that the round of bank stress tests had addressed all the important risks in the banking system. Up to 80 per cent said the frequency of stress testing needs to be increased to at least once every six months.

McGovern stated that the value of undertaking these stress tests is systemic. "If all of the banks deemed 'too big to fail' react the same way to a crisis, that usually leads to every one trying to get out the same fire escape at the same time," he said.

Further findings from the report showed that almost all of those questioned believe that Basel III and the incoming capital adequacy requirements will have a negative impact on future bank profitability.