SunGard: Regulation Burden Crimps Growth for Financial Services Firms
Regulatory change is second only to market volatility as an executive issue for financial services firms, a survey issued by SunGard suggests.
Entitled ‘The Regulatory Pressure Cooker: Assessing Regulatory Stress in the Financial Services Sector’, the survey, commissioned by SunGard and conducted by Longitude Research in late 2013, polled 400 senior financial services executives worldwide.
‘With many new regulations taking effect during the course of 2014, in some cases [regulation] is even considered the number one strategic risk,’ comments SunGard. Senior executives are now concerned that regulatory change is distracting attention from core business activities and potentially hindering companies’ ability to grow.
Adapting to new regulations is also causing financial services firms to rethink their approach to compliance and restructure their organisations accordingly. Many, however, still do not feel ready for the changes taking effect this year.
Key findings of the survey include:
Despite ongoing efforts, readiness levels remain relatively low:
Firms are starting to move beyond checking the box:
“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,” said Jeffrey Wallis, managing partner and president of SunGard Consulting Services.
“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.”
A copy of the report is available here.