In new survey conducted by SunGard, “The Regulatory Pressure Cooker: Assessing Regulatory Stress in the Financial Services Sector,”?findings have disclosed that regulatory change is behind market volatility as an executive issue for financial services firms. From a press release?highlighting them, it noted that from the numerous regulations taking effect this year, it may also be a top strategic risk.
In addition, from the 400 senior executives polled globally, firms have expressed concerns that regulatory change is taking attention away from one’s core business activities, possibly delaying a company’s ability to grow. As a result, these firms are “rethinking compliance and restructure their organizations accordingly.” Many added they are not ready for the impending changes.?
Key survey findings include the following:
Regulation is high on the executive agenda?
- The pressure of dealing with change has expanded beyond compliance departments into the C-suite. One of two respondents warns that dealing with regulatory change has impacted shareholder returns and the ability to invest for the future.
- ?Almost half of respondents describe themselves as ?highly stressed? by the current pressure of regulatory change, with little prospect of imminent improvement.
- ?The broad nature of regulatory change is driving a more cross-functional response within businesses. Best-in-class institutions are breaking through siloes, allowing for a more efficient response to the issue.
Despite ongoing efforts, readiness levels remain relatively low.
- Only one in two companies say they are highly ready for the regulatory changes that they must confront throughout 2014 and 2015.
- Financial services firms plan to continue investing heavily in technology, people and processes over the next two years to cope with regulatory change.
- ?Firms are starting to move beyond checking the box.?While recognizing the benefits of a culture change to compliance, forty percent of respondents are finding it challenging to move beyond a checking the box approach.
- ?Despite concerns that the degree of regulatory change is overblown, most firms responded in the survey that they accept the need for change and are moving along with their responses to new regulations.
Jeffrey Wallis, managing partner and president of SunGard Consulting Services, said in the press release of the findings,?The definition of what regulators are becoming concerned about is broadening to include areas such as operational risk, adding extra strain to the financial services industry. Our survey demonstrates that executives at the highest levels are struggling to marry ensuring regulatory readiness with maintaining a focus on day-to-day operations. In our work with firms on regulatory compliance, we see the most success when a business takes a combined approach to the twin challenges of growth and compliance.?