More than a third (36 per cent) of financial services businesses in the UK have been penalised in the past 12 months for failing to meet regulatory compliance demands, research from Davies has revealed.
The specialist financial services consultancy division of Davies, Consulting at Davies, commissioned an independent survey of 501 senior decision-makers within UK-based financial services companies.
It found that 36 per cent of the businesses polled admitted to having faced regulatory compliance penalties between June 2023 and June 2024.
Davies banking and markets EMEA practice co-lead, Silvia Amoros, said: “The regulatory compliance landscape is constantly evolving, and our research shows how many businesses in the financial services industry are struggling to keep pace with the changes taking place.
“Failure to do so is not only likely to incur significant penalties, but can also bring huge damage to a company’s reputation.”
Amoros added that ensuring businesses have the trust of customers and delivering the best possible outcomes to those customers is “fundamental” to the success of any financial services firm.
She pointed out that meeting regulatory compliance demands is “central” to this.
“For a challenge that is so significant, complex, and time-consuming, seeking the support of external experts can be an effective method to ensure the business meets obligations while also freeing up time to allow its team to focus on other core business activities,” she added.
The research also found that, when given a list of challenges that their businesses are currently facing, regulatory compliance was the second most commonly selected option, cited by 43 per cent of respondents, just behind turbulence, cited by 44 per cent.
Additionally, Consulting at Davies’ research found that over three fifths (62 per cent) of decision makers in the financial services sector believe it has become more difficult to keep up with regulatory compliance requirements over the past five years.
Meanwhile, 63 per cent said the introduction of consumer duty in July 2023 has led to changes in the way they serve customers.
tom.dunstan@ft.com
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