10 February 2014

Hedgeweek: Regulatory change slowing growth among financial services firms, says SunGard

Regulatory change is second only to market volatility as an executive issue for financial services firms, according to research by SunGard. With many new regulations taking effect during the course of 2014, in some cases it is even considered the number one strategic risk.

Senior executives are concerned that regulatory change is distracting attention from core business activities and potentially hindering companies’ ability to grow. Adapting to new regulations is 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.

The pressure of dealing with change has expanded beyond compliance departments into the C-suite. One in 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. While recognising the benefits of a culture change to compliance, 40 per cent of respondents are finding it challenging to move beyond a checking the box approach.


Financial services firms plan to continue investing heavily in technology, people and processes over the next two years to cope with regulatory change. Jeffrey Wallis, managing partner and president of SunGard Consulting Services, says: “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.”

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