More compliance needed for financial services

Financial services companies in the UK are continuing to under-estimate the compliance challenge facing the sector, according to new research. Despite ongoing changes to existing regulations and the introduction of new legislation, the survey reveals that more than a quarter of organisations in the financial services industry believe they are fully compliant. Only two per cent of respondents admitted that they were uncertain of their ability to comply with the most important regulations, while 71 per cent stated that projects were underway and they would meet the deadlines.

The survey, carried out by Finextra Research, also reveals that many IT systems are failing to meet the demands of compliance. Some 39 per cent of respondents admitted that their current infrastructure is doing a poor job or needs improving. Nearly 60 per cent of financial services companies are introducing new systems to help meet their compliance obligations.

According to the research, which was sponsored by IT services company Computacenter and Sun Microsystems, financial services organisations are now taking a ‘big picture’ approach to compliance. More than 80 per cent of respondents cited that their organisations were looking for common areas when planning new compliance initiatives to avoid duplication of effort.

However, the legal landscape is constantly changing – for example, new consumer credit regulations recently came into force in the UK. On top of this, there are the recent developments in data protection, risk management and outsourcing, which all impact the financial services industry.“Industry best practice is at the heart of much of the new legislation and regulations, and, as a result, compliance can deliver many more benefits than just keeping a company on the right side of the law,” said Simon Gay, consultancy practice leader at Computacenter.

“By combining compliance efforts with service improvement programmes, financial services companies can ensure that IT systems and processes, such as email archiving and disaster recovery, are also in line with the needs of the business.”