More than a third (34%) of IT decision-makers across the UK financial sector regard key financial services regulations such as PSD2 and FRTB as a driver of innovation within financial services organisations, while fewer than a quarter (24%) see them as a barrier to it.
That is according to survey of IT decision-makers across a range of financial and banking sector organisations, including retail and investment banking, asset management, hedge funds and clearing houses.
The survey, commissioned by software vendor, InterSystems, also found that just 20% of these decision-makers believe their organisation is very well prepared for the roll-out of the new regulations.
Graeme Dillane, financial services manager, InterSystems said: “Historically, firms have responded in a piecemeal fashion by putting in place new siloed applications to meet the needs of each new ruling. The latest round of regulations raises the stakes by effectively demanding businesses break down their data silos, better integrate their data enterprise-wide, and analyse it in real time in the context of new event and transactional data. All of that makes it vital that organisations innovate now.”
To lay the foundations for innovation, firms need automated systems. Currently, however, automation levels are low. Just 21% of the sample said they had fully automated the processes they had put in place to meet regulatory and compliance demands. 33% said they had not automated them at all.
More positively, the survey indicates that IT decision-makers across this sector are aware of what needs to be done to change this. Nearly two thirds (66%) said that they expect innovative technology will have an important role to play in ensuring regulatory compliance for financial services businesses over the next five years.
“It’s clear that financial services businesses increasingly understand just how crucial it is to actively innovate in order to address the challenges presented by the latest industry regulations,” says Dillane, “and the good news is that we are starting to see evidence on the ground that they are seeking out new solutions to help ensure their compliance.”