Despite “reform fatigue” and squeezed profit margins, financial services firms are dealing with a continued flood of regulation. Some are turning to new technologies for compliance help.
In this article, written by the Economist Intelligence Unit and sponsored by Mazars, we explore regulatory change in the financial services sector and the impact that it has not only on global financial markets, but on costs to both the financial services providers and their clients due to decreased liquidity, less risk taking and a flight to quality. Regulatory change is often thought of as being driven by macro prudential and financial stability risks, in addition to geo-politics. After all, Brexit negotiations, Europe’s alternating political and economic landscape, Asia’s growing importance as a financial centre, and president Trump’s promises to remove regulatory rules may greatly change global financial regulations in coming years and create opportunities for regulatory arbitrage. However regulation is likely to increasingly be driven by the regulators trying to catch up with technological developments. This is already demonstrated with the advance of ‘regtech’ – a sub-set of fintech that concentrates on how technology can assist in the delivery of regulatory requirements. Overall this article investigate the above with a view of what the global financial sector’s regulatory landscape may look like in 2030.
Please click here to download the article or visit the dedicated microsite on www.eiuperspectives.economist.com. A final and third article on business model transformation will be released later this year.
The Financial Services Future: Transforming an industry
In partnership with the Economist Intelligence Unit, Mazars has developed a unique programme of thought leadership to examine the current challenges the Financial Services industry is facing. The series of articles focuses on the current transformation of the financial services industry and its likely shape in the future from three different but related perspectives: technological, regulatory and business model transformation. The proposed programme consists in a series of articles tailor-made for a senior finance executive audience and relevant across the financial service industry. These articles explores the links between technological disruption in the financial services area including its impact on the regulatory environment, and the financial services response. We are also looking at how regulatory changes have forced financial services firms to adapt or even create new operational models that incorporate new technologies to meet regulatory requirements and the further impact this has on the firms’ value chains.