That's the conclusion of this week's report from Action 2000, the Government's millennium bug taskforce. They gave eight of the UK's 450 biggest financial institutions a red rating, indicating "severe risk of material disruption", and about 144 companies amber. The latter companies, the Financial Services Authority says, are "behind but expected to catch up".
Robin Guenier, director of Taskforce 2000, an independent firm of millennium bug consultants, warns: "Any IT job that falls behind never catches up. Those amber companies are almost as worrying as the reds."
In a world where the value of any investment you make amounts to little more than a string of digits in the managing company's computer, few people would choose to leave their savings with a company rated as red. So, how can you check the degree to which your own bank, life insurer or fund manager is ready for the year 2000? How can you avoid those eight laggards which are on a very shaky footing?
First of all, don't expect the regulators to help you. The Action 2000 ratings are determined by the FSA, which refuses to say which company is in which category. FSA spokesman Robin Gordon-Walker says: "We're certainly not naming now. The reasons why are imperiling confidence and creating the potential for a run on financial institutions, which would only damage their existing depositors, policyholders or investors." Mr Gordon-Walker says the FSA will be asking each chief executive from the sector's 450 biggest groups to confirm in writing that their own company has done everything reasonable to ensure year 2000 compliance.
Just about every company in the industry has already issued a bland corporate statement about its own millennium readiness. Invariably, they are peppered with words like "confident" and "robust", but offer no real clue as to which of the bullish-sounding companies issuing them are whistling in the dark.
When the Action 2000 report came out last Monday (July 12), The Independent circulated a questionnaire to the UK's 10 biggest banks, 10 biggest life insurers and 10 biggest fund managers. There was one question: "What was your own company's colour rating in the Action 2000 report?" Almost all the companies said that the FSA told them their own ratings only on the condition that they not tell anyone else, or claimed not to know what rating they had been given. Only Scottish Widows were prepared to speak out. Grant Hamilton, head of Scottish Widow's Year 2000 team, says: "We've been rated as a blue by the FSA". A blue rating indicates no identifiable risk of material disruption.
How much faith should we place in the FSA's classifications anyway? As recently as March this year, the FSA had 47 companies labelled as red. By the end of June, when information used in the report was finalised, only eight reds remained.
Do these changes show a surge of progress among the industry's worst companies? Or are they evidence of their desire to avoid a red rating by telling the FSA what it wants to hear?
Four key questions to ask your financial provider before committing funds to any organisation:
Are all computer and computer-related systems in your organisation and its key suppliers fully prepared for the century date change?
Have you completed business continuity planning regarding possible internal and external problems arising around the date change?
Has all the above been verified by independent audit, and can I see a copy of the audit report?
Is your chief executive willing to confirm in writing that all is well?Reuse content