Custom-written software applications are causing huge losses for the UK's financial industry. A Vanson Bourne survey suggests that 29 percent of UK financial institutions suffered losses amounting to more than £5,000 an hour in the past year, with 65 percent of organisations taking more than an hour to fix the custom-software problems.

The survey, which was sponsored by software company Managed Objects, found that financial organisations were particularly reliant on in-house software, with 53 percent of a company's progams being custom written.

According to Jim White, Managed Objects' business technologist, businesses in the financial sector have to use custom-written software. White said when they work correctly such programs should be the means of gaining a competitive advantage.

"If I use Microsoft Outlook i a particular way, I gain no advantage from that as other organisations will be using the software in a similar way.

"But a custom-written application that can monitor small changes in the financial market and gain a financial advantage from that could be hugely beneficial to the company.

"So, there will always be this dependency on custom-written software."

He added that all organisations had a huge volume of legacy software that drove many of their back-end functions and these added to the problem, which was exacerbated further by the front-ends to many of these processes.

"What we're dealing with is a complex set of inter-dependencies, where one small change in one part of the organisation could throw up a problem elsewhere."

White said that the problem was that conventional discovery tools designed for packaged software could not handle customised software.

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The survey doesn't tell the whole story, though. According to the research, nearly 40 percent of IT outages are caused by hardware problems rather than faults with the software and Vanson Bourne didn't split the cost of hardware-derived problems from software-derived ones.

White said that it was not a problem that would go away. The rise of virtualisation - while great for environmental reasons - and SOA (service-oriented architecture) would cause an added layer of complexity which would lead to more expensive downtime, he added.