The financial services regulatory environment is in a state of constant flux. Many legislative bodies around the globe publish regulations that are growing in both volume and complexity. Achieving and maintaining regulatory compliance has increased the cost of doing business significantly.
Ongoing regulatory compliance is likely to remain top of the corporate agenda for the foreseeable future. In practice, legislation is reshaping the global financial services industry and will determine future business models. The sheer depth, breadth and pace of regulatory mandates mean that financial institutions have already diverted billions of dollars of infrastructure investment into regulatory compliance programmes. If these are not managed strategically, they will increase both technology and processing costs further. This phenomenon has become known as what GFT research has confirmed as ‘The New Normal – a state of continuous regulatory change in the financial markets’.
Although the regulatory challenge is complex and daunting, there may be comfort in knowing that it is so for all financial institutions. All financial organisations need to design, implement and manage efficient processes to on-board regulation and maintain compliance. However, financial organisations worldwide have risen to the regulatory challenge in a number of different ways. Many have implemented tactical solutions and workarounds. While these may have worked in the past, success in The New Normal requires a fresh approach.
This paper examines the current legislative compliance challenge, viewed in the light of substantial practical experience. It breaks the challenge down into its constituent parts and shows how these mesh together. More importantly it shows how these components are inextricably linked and cannot be managed in isolation. In practice, regulatory compliance has become a strategic concern that requires a sustainable solution.
Download GFT’s paper “Delivering RCM: Time for a Smart Approach” here.