In an addendum to its worldwide survey of 400 financial services executives titled The Regulatory Pressure Cooker, SunGard spoke to 50 executives sitting within asset managers, custodians, hedge funds, wealth management firms, banks and stock brokerages.
Forty-six per cent of respondents said their businesses were ‘highly stressed’ due to the pressure of regulatory change, with a further 49 per cent labelling themselves ‘moderately stressed’.
“Like their global counterparts, there is little prospect of imminent improvement: while only 12 per cent expect to be highly stressed in two years’ time, 88 per cent expect to be highly or moderately stressed,” said the report.
Almost two thirds of Australian executives said that dealing with regulatory change has distracted them from core business activities, compared with only half of respondents on a global basis, according to SunGard.
Thirty-nine per cent of respondents agreed that regulatory change had ‘limited [their] organisation’s ability to invest in new growth opportunities”, while 32 per cent were neutral and 29 per cent disagreed.
Almost three quarters of Australian firms expect their compliance spending to rise by an average of 10 per cent.
“Almost all of the [Australian] respondents surveyed consider reputation damage to be their worst fear regarding a compliance failure, compared to just over 50 per cent globally,” said the report.
“Compared to their global counterparts, more Australian financial services firms have adopted the mindset that compliance is a strategic exercise that can support their larger business goals.
“Despite this, one in two respondents still describe themselves as ‘highly stressed’ by the current pressure of regulatory change,” the report said.
“In the next two years, financial services firms in Australia expect to continue to invest heavily in the areas of technology, people and process change,” it said.
