IBS Journal October 2015


It’s only money: UK Financial Conduct Authority wastes £3.2 million on unused Oracle licences


The UK’s financial services regulator, the Financial Conduct Authority (FCA), has revealed it misspent £3.2 million on unnec- essary Oracle software licences. The watchdog’s revelation came to


light in a ‘losses statement’ within its yearly financial accounts. The report says: ‘In May 2014, the FCA


entered into a one year contract to purchase a number of software licences. The contract involved the FCA making a prepayment in order to secure the licences at a significant discount to the list price. Utilisation of these licences by the FCA has not materialised as originally anticipated and thus £3.2m of the prepayment has been written off as a con-


structive loss. The contract expired in May 2015 and is not being renewed.’ A Freedom of Information request was


also sent to the FCA concerning the loss of money. The FCA’s response: ‘The value of the


licences that the FCA estimated it would require during this one-year deal proved to be incorrect for three key reasons. ‘The assumptions underpinning the


agreement did not anticipate that some pro- jects that originally required Oracle licenc- es would be de-prioritised by the FCA thus reducing demand; some projects would be implemented later than anticipated and hence fell outside of the agreement’s one-


year timeframe; and some projects would adopt an alternative technical solution.’ Before entering this contract with Ora-


cle the FCA said its key focus for the year was on technology risk. It then promised to do a year-long review on how the UK banks and building societies managed this risk, and the efficiency of their IT systems. Its yearly financial accounts show that


total IT costs for 2015 (period ending 31 March 2015) was £91.5 million. In 2014 it was £91.9 million. The FCA does not receive funding from


the UK government. All its funds are through raising fees from companies it regulates. Antony Peyton


news


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