COMMON PITFALLS IN INITIATING REGULATORY CHANGE AND REMEDIATION PROGRAMMES
R&C: Why is it so challenging to deliver regulatory change and remediation programmes?
Parry: With multiple regulators handing-down overlapping and sometimes misaligned regulatory requirements, financial services firms face a race against time to make the changes needed to ensure compliance. Organisations are often required to take corrective action in the form of ‘lookback’ exercises and remediation of processes, systems and governance, simply to comply with existing regulation. At the same time, they are expected to ready themselves for incoming requirements by enacting regulatory change programmes, further stretching the resources and subject matter expertise needed to meet compliance demands. Every regulatory change or remediation programme carries complexities and regulators are notoriously intolerant of firms that under-deliver. An improper understanding of requirements, missed deadlines or prolonged operational disruption can result in spiralling costs and unwanted additional regulatory attention. Despite this, failure rates are high, leading many firms to play catch-up by performing corrective work or initiating a patchwork of hastily planned programmes which do little to facilitate sustainable compliance. The pace of change is only set to increase as the scope of regulation continues to expand, bringing with it added pressures of addressing individual accountability and organisational culture. With compliance programmes already absorbing as much as 60 percent of transformation budgets – diverting time and resources away from other strategic priorities like digital transformation and cost efficiency initiatives – a smarter approach to implementing sustainable regulatory change is required.
Jan-Mar 2019 Issue