Poll Results - Most Pressing Regulation In Finance
Thank you very much to all of you who provided input to us over the last months! As promised, here the main insights out of the survey “most pressing regulation in finance” we release in the last newsletter prior to the summer break. This short article summarizes the main findings and sheds light into improvement opportunities within the financial industry when it comes to the adoption of regulatory reforms.
How is your institution doing?
58% for you claimed an effective adoption of regulatory requirements. Would this be the result of an election, then the banking industry would have collected a strong win! Unfortunately, that’s not the case and highlights how 42% of you faced lengthy adoption and remediation phases at your institution. Additionally, most of you (79%) highlighted the lack of efficiency in the understanding and adoption of the regulatory requirements. See Figure 1 for the complete picture.
Figure 1: How is your institution doing with respect to adoption of new or changing regulatory requirements?
Time consumption
In Figure 2 below we have summarized your relation to major regulatory frameworks. These are sorted horizontally by number of answers received, and vertically by their stage, i.e. are you rather involved in their adoption, maintenance, or in related remediation activities (result of a previous non-effective adoption). Among others, the Basel and IFRS capital and provisioning framework seem to keep busy a vast majority of you. These being quite mature frameworks, could highlight their inefficient adoption as well as the need for automation and proper tools to be in place as to ensure an efficient handling of them.
Figure 2: Stage of regulatory program
Right tools for the right job?
Think for a moment about having to act as a woodcutter. To cut a tree, you would easily prefer a chainsaw over a knife I guess. But even a chainsaw might not be the most appropriate tool to cut wood. Depending on the activity to perform you might be much better off using a wood splitter or even with a diamonded circular saw as to ensure an effective and efficient job. Interesting enough your feedback highlighted a positive correlation between the lack of efficiency and/or effectiveness in the adoption of regulatory requirements and the lack of proper tools. Majority of you highlighted how either standard MS Office tools (flexible but not scalable/traceable) or Jira (good for workflow management – who does what? – but often misused as requirements or testing evidence tools) would be in usage. These are clearly widespread tools in the banking industry, but clearly lack of the right functionalities as to ensure a proper requirement’s management (inclusive of testing, traceability, version control, variant management, lifecycle management, etc.). See Figure 3.
Figure 3: Which tools does your institution have available to facilitate regulatory compliance/adoption of new regulations?
Figure 4 concludes with a general support (74%) and curiosity about which tools/databases could be made available to ease regulatory compliance and free up resources. Some of you (26%) are instead in favour of standard tools, and various of you claim effective and efficient compliance. This might well be true. Coming back to the woodcutter example, one can go quite far even with a well maintained and regularly sharpened chainsaw. Still the banking industry does not usually have the patience of a woodcutter and the pressure on regulatory requirements’ adoption might be at edge with the proper maintenance of standard tools. More advanced tools usually prevent this via tailor made configurations which empower users and facilitate their day-to-day operations towards regulatory excellence.
Figure 4: Do you see added value for your institution in investing in professional requirements management tools/databases to ease regulatory compliance?
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