AxiomSL, the global leader for risk data management and regulatory reporting technology for the financial services industry, today made public the results of its survey of 132 senior-level risk and regulatory executives in North America and Asia-Pacific (APAC). The survey, conducted in June 2017, measures financial services executives’ outlook on the regulatory landscape and the technology investments they plan to make to uphold compliance.
When asked about the biggest regulatory challenges they anticipate their organizations facing within the next three years, two-thirds of North American respondents (66%) cited adapting to upcoming regulatory changes, 55% said improving data aggregation and reporting, and 38% said allocating necessary resources and capital toward ensuring compliance.
Respondents in APAC highlighted the same three concerns, but their primary challenge is allocating the necessary resources and capital (66%). Fifty-nine percent of APAC respondents said improving data aggregation and reporting is another top concern, and 57% selected adapting to upcoming regulatory changes.
“While executives in North American and APAC differed on the ranking, they all agree that one of the biggest challenges is adapting quickly to upcoming regulatory changes,” said Alexander Tsigutkin, CEO of AxiomSL. “To this end, firms need to ensure they have an agile technology platform that seamlessly interfaces across business functions to optimize business automation processes and controls while delivering workflow transparency and data lineage.”
Apprehension on the Rise in APAC
The survey found that compared to their North American counterparts, APAC executives have become significantly more concerned about their organizations’ ability to comply with upcoming regulations over the last year. More than two-thirds of APAC respondents (69%) said they are more worried this year compared to last year, while just 13% said they are less concerned and 18% reported no change. In North America, less than a third (28%) of respondents said they are more concerned, 33% said they are less concerned, and 13% said there has been no change.
“It’s difficult to predict with complete accuracy which new regulations will take effect, and when,” said Peter Tierney, CEO of AxiomSL’s APAC region. “What is clear is that firms need to be more forward-looking and strategic, not only preparing for regulatory changes on the immediate horizon, but also investing in technology that can be leveraged and optimized to operate in a range of different regulatory climates.”
Increase in Technological Investment in Both Regions
Almost half of the executives in North America and APAC who participated in the survey reported that their firms will increase investment in risk and regulatory compliance solutions in 2017, compared to 2016. Forty-eight percent of North American respondents said their organizations plan to increase investment, compared to 44% of APAC respondents. Just 11% of North American respondents and 10% of APAC respondents said their firms plan to decrease investment.
When asked which risk and regulatory technology investments their firms plan to make in the next three years, executives from both regions cited data management (66% in North America; 61% in APAC) and reporting (63% in North America; 67% in APAC). Other top areas of investment in North America are risk and capital analytics (50%) and cloud computing (45%), compared to 37% and 24% in APAC, respectively.
“Executives in both regions understand the critical role technology plays in addressing the increasingly complex regulations, as well as the increased volume and granularity of data demanded from internal and external stakeholders.” Tsigutkin added. “Firms need to adopt a strategic posture and be able to reuse and leverage data and processes to transition their business into future success.”
Mistrust of Data Due to Inadequate Data Lineage and Process Governance
Finally, the survey revealed doubts about data integrity in both regions. More than half (53%) of respondents in APAC said they don’t trust the accuracy of their organizations’ data, compared to more than a third (35%) of North American respondents. Both regions cited inadequate data lineage and process governance as top reason (31% in APAC and 22% in North America).
About the Survey
This survey was conducted at AxiomSL’s 8th Annual User Conference, held in New York City and Singapore, in June 2017. Copyright is held by AxiomSL.
AxiomSL is the global leader in risk data management and regulatory reporting solutions for the financial industry, including banks, broker dealers, asset managers and insurance companies. Its unique enterprise data management (EDM) platform delivers data lineage, risk aggregation, analytics, workflow automation, reconciliation, validation and audit functionality, as well as disclosures. AxiomSL’s platform supports compliance across a wide range of global and local regulations, including Basel III capital and liquidity requirements, the Dodd-Frank Act, FATCA/CRS, EMIR, FRTB, COREP/FINREP, CCAR, MiFID II, FDSF, BCBS 239, Solvency II, AIFMD, IFRS 9/CECL, MAS, APRA, REMIT, SFTR, central bank disclosures, and both market and credit risk management requirements. The company’s technology and solutions have numerous accolades, including success in the Best Reporting Initiative category of the American Financial Technology Awards, Best Implementation at a Sell-Side by Incisive Media, and highest recognition in the Customer Satisfaction section of the Chartis RiskTech100 rankings.
