Cory Levine writes in the Wall Street & Technology column about the results of a recent study by Deloitte & Touche's Center for Banking Solutions. Deloitte surveyed chief compliance officers, chief risk officers and other senior executives at 20 of the top 50 financial institutions in the US and found compliance costs are eating up more and more net income, growing from 2.83 percent of net income in 2002 to 3.69 percent in 2006. The report goes on to say:
One of the primary reasons for the increase in costs, according to Deloitte, is that institutions are responding to regulation by applying human resources to monitor compliance, rather than investing in scalable technology resources to manage the effort. The research report shows that 60 percent of respondents' compliance-related spending in 2006 was on compensation, while only 19 percent of spending was on consultants and vendors; 18 percent went to capital expenses, including systems, hardware and software.Searching email for compliance is probably one of the largest contributors to increased expense in this area. Organizations with compliance needs should look to the new generation of SaaS solutions for budget relief. Hosted email archiving can provide archival search infrastructure more economically than an on-premise system.