Basel II is already gaining popularity and acceptance among the G-10 nations. All banks and enterprises involved in securitization and dealing with long-term equity holdings, such as private equity and venture capital, are incorporating the recommendations of Basel II.

The new accord will affect all spheres of the financial sector, including insurance and capital markets. The most significant impact of Basel II will be on the IT infrastructure of financial institutions. CIOs will need to align the business needs of their enterprises with technologies that support them. For this, common definitions and reporting structures will be implemented and information must be integrated to comply with the new Basel II standards.

These challenges can be achieved by outsourcing Basel II and other finance related projects to IT service providers- who could offer a coherent architecture and platform that helps automate processes and reduce costs while effectively integrating systems. IT service providers therefore not only provide a variety of services that help financial systems in implementing Basel II, but also empower financial institutes with a competitive advantage.