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The REGTECH Book
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The REGTECH Book

by Janos Barberis, Douglas W. Arner, Ross P. Buckley
August 2019
Intermediate to advanced content levelIntermediate to advanced
392 pages
14h 11m
English
Wiley
Content preview from The REGTECH Book

Spend on Compliance: A Necessary Evil or Business Enabler?

By Nicola Cowburn1 and Patrick Barnert2

1Chief Marketing Officer, CUBE

2Non-Executive Director, Evolute Group AG

Compliance, not banking, has been the real growth business since 2008. Unprecedented increases in the volume and complexity of financial services regulation are worrying senior executives, and are having a negative impact on profitability.

Compliance as a Cost Centre

The number of international regulatory alerts has topped 200 daily1 (more than 51,000 annually) and is doubling every two years, indicating a gloomy outlook of spiralling costs. For most financial institutions, compliance is a cost centre that can represent as much as 10% of operating costs.

In a much-publicized 2015 Bloomberg interview,2 Jamie Dimon, CEO at JPMorgan Chase, highlighted the problem: ‘In the old days, you dealt with one regulator when you had an issue, maybe two. Now, it is five or six. It makes it very difficult and very complicated.’

Many regulated firms liken the cost of compliance to an insurance premium: expensive, yet mandatory. You hope you will never need to defend your firm from allegations of wrongdoing; nevertheless, you must pay whatever it costs to protect your firm, putting people, systems, and processes in place that would prove its innocence and demonstrate that you acted in a client’s best interests, should the need arise.

Some people view spending on compliance as a necessary evil. It is ‘necessary’, certainly, ...

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Publisher Resources

ISBN: 9781119362142Purchase book