Although most commentators agree that all regulation has a worthy aim, achieving and maintaining regulatory compliance has increased the cost of doing business significantly. But it is worse than that – regulatory compliance is often an impediment to business agility and a major distraction from core activities.
For most financial institutions, 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 in 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 something GFT has been able to confirm 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 all financial institutions are feeling the pressures. All organisations throughout the financial sector need to design, implement and manage efficient processes to onboard 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.