10 reasons for Regulatory Compliance Change

Regulations of all types have evolved into detailed frameworks covering many aspects of financial services and technology. In recent years, national and international regulations have increasingly addressed issues of information management, information technology and specialist disciplines within these fields. As a result, both senior management and specialist practitioners are now in a position to transform existing regulations into practical and manageable concepts that support GRC at the organizational level. The drivers for regulatory change include:

1. Growing sophistication of financial technology, leading to more complex activities and risk profiles in financial services organizations
2. Globalization of banking and the geographic spread of financial operations across national borders
3. Increased collaboration between regulators across geographic jurisdictions, driven by the need for market oversight and supervision
4. Widening of compliance requirements into other sectors of the financial services industry, such as anti-money laundering legislation and regulation
5. Increased expectations for corporate accountability, emphasizing the importance of enhanced governance, ethics, independence, transparency and rigorous market disclosure
6. Increased expectations for the standard of care that directors must exercise in discharging their fiduciary duties, greatly expanding their scope of responsibility and the potential liability of board members and committees
7. Heightened public interest and pressure from nongovernmental interest groups, shareholders and the media around governance and risk management, combined with the stronger influence of these groups in regulatory debate
8. Internal and external reporting from various applications and databases
9. Divergence in compliance standards to satisfy country/host country regulators
10. Heavy reliance on the IT infrastructure to provide an efficient and effective service and increased reliance on third parties as a result of developments in the payments and settlements adopted in various jurisdictions Given the increasing complexity of the global business environment, it is likely that regulation will be more specific in the future, addressing areas not covered in the current regulatory landscape. Although this change in the landscape may be regarded as overregulation, regulators are expected to maintain market confidence, safety and sound practices in financial institutions, including the protection of shareholders, transparency and corporate integrity.