Regulation paramount for Australian firms
27 August 2014 Melbourne
Image: Shutterstock
Regulatory change has been ranked highest on a list of executive issues for Australian financial services firms, according to a recent report by SunGard financial Systems.
Almost all of the respondents surveyed (95 percent) considered reputation damage to be their worst fear regarding a compliance failure, compared to just over 50 percent globally.
Nearly half of surveyed respondents described themselves as 鈥渉ighly stressed鈥� by the current pressure of regulatory change, though this rises to 95 percent if including those who are 鈥渕oderately stressed.鈥�
Like their global counterparts, there is little prospect of imminent improvement: while only 12 percent expect to be highly stressed in two years鈥� time, 88 percent expect to be highly or moderately stressed. This stress is being felt across all businesses and by a wide range of key stakeholders, including the C-level executives.
Compliance is viewed as a strategic advantage in Australia. Compared to the responses from the global survey, a higher percentage (61 percent) of Australian respondents have adopted the mindset that compliance is a strategic exercise that can support their larger business goals.
As a result, 68.3 percent of respondents now see regulatory compliance and oversight as a regular board-level discussion in their organisations.
The report also states that dealing with regulatory requirements is 鈥渄emanding attention from various aspects of the business, potentially disrupting performance鈥�.
Almost two-thirds of respondents warned that dealing with regulatory change has distracted their firms from core business activities, compared to only half of the global respondents interviewed.
Firms may have put measures in place to handle regulatory change, but there is still a significant percentage of firms (32 percent) that do not feel 鈥渉ighly ready鈥� for the changes coming their way.
Upon further analysis, the sense of being 鈥渉ighly ready鈥� is even lower in areas such as skills, budgets and technology. In fact, more than 20 percent of firms feel that they have very limited readiness in areas such as technology.
Another common theme among the global and Australian respondents is the plan for financial services firms to continue investing in technology in the coming years, with more than 80 percent of companies interviewed expecting an increase in overall technological investment related to regulatory and compliance changes in the next two years.
Almost all of the respondents surveyed (95 percent) considered reputation damage to be their worst fear regarding a compliance failure, compared to just over 50 percent globally.
Nearly half of surveyed respondents described themselves as 鈥渉ighly stressed鈥� by the current pressure of regulatory change, though this rises to 95 percent if including those who are 鈥渕oderately stressed.鈥�
Like their global counterparts, there is little prospect of imminent improvement: while only 12 percent expect to be highly stressed in two years鈥� time, 88 percent expect to be highly or moderately stressed. This stress is being felt across all businesses and by a wide range of key stakeholders, including the C-level executives.
Compliance is viewed as a strategic advantage in Australia. Compared to the responses from the global survey, a higher percentage (61 percent) of Australian respondents have adopted the mindset that compliance is a strategic exercise that can support their larger business goals.
As a result, 68.3 percent of respondents now see regulatory compliance and oversight as a regular board-level discussion in their organisations.
The report also states that dealing with regulatory requirements is 鈥渄emanding attention from various aspects of the business, potentially disrupting performance鈥�.
Almost two-thirds of respondents warned that dealing with regulatory change has distracted their firms from core business activities, compared to only half of the global respondents interviewed.
Firms may have put measures in place to handle regulatory change, but there is still a significant percentage of firms (32 percent) that do not feel 鈥渉ighly ready鈥� for the changes coming their way.
Upon further analysis, the sense of being 鈥渉ighly ready鈥� is even lower in areas such as skills, budgets and technology. In fact, more than 20 percent of firms feel that they have very limited readiness in areas such as technology.
Another common theme among the global and Australian respondents is the plan for financial services firms to continue investing in technology in the coming years, with more than 80 percent of companies interviewed expecting an increase in overall technological investment related to regulatory and compliance changes in the next two years.
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