Compliance Is No. 1 IT Priority For Banks: Report

U.S. banks will spend $2.6 billion this year, or 4.2% of their total IT budgets, on systems for achieving compliance, according to a report released Thursday by research firm Datamonitor.

Compliance is consuming a larger percentage of banks' IT spending as they cope with a rash of new regulations, including the Sarbanes-Oxley Act, the USA Patriot Act, and Basel II. Last year, 3.8% of IT budgets went to compliance. That's expected to jump to 4.6% in 2006.

More than 80% of respondents surveyed by Datamonitor said that compliance is their top IT priority this year, supplanting core operations and branch renewal as primary drivers of IT spending.