BackBay: Compliance expenditures increasing
21 June 2018 New York
Image: Shutterstock
Asset managers expect compliance expenditure and regulatory burden to increase over the next five years, according to new research from BackBay Communications and Osney Media.
The report titled “The Summit for Asset Management”, explored the evolving role of compliance, regulation, and its implications for the future of the asset management industry.
Some 68 percent of respondents said they anticipated that a large portion of their organisation’s financial resources will be dedicated to compliance in the coming years.
Additionally, 36 percent of asset managers predicted their firm’s compliance budget would account for more than five percent of revenues within the next five years.
When it came to considering the second Markets in Financial Instruments Directive (MiFID II), one in four respondents (25 percent) said it is representative of a significant challenge to their business.
A further 15 percent said MiFID II had impacted the competitiveness of their business.
Other findings from the report conveyed some 76 percent have automated or outsourced at least some compliance functions. And, over half of those polled intended to outsource or automate more compliance functions in the next five years.
Additionally, of the emerging technologies presented, 30 percent said robotic process automation and machine learning would have the biggest impact on the compliance function of their organisations.
The report also found that one in four did not think technology will dramatically alter the compliance function.
James Hatwell, content producer at Osney Media, commented: “The regulatory landscape for asset management has been in constant flux since the financial crisis began a decade ago.”
“As such, it is no surprise that many of our survey respondents believe compliance costs will continue to rise in the coming years. As new technologies begin to take centre stage, firms are presented with both opportunities for cost-savings and additional compliance challenges. It will be interesting to see which firms can make the most of these emerging platforms.”
Bill Haynes, CEO and founder of BackBay Communications,, said: “With the advent of regulations like the General Data Protection Regulation and MiFID II, it’s become clear that many firms are still unsure of how to best meet the ever-changing regulatory standard and what technology’s role should be.”
He added: “These uncertainties also present great opportunities for asset managers to proactively put the processes in place to make the most of what these new technologies and platforms have to offer in terms of client service and engagement. Although it poses a challenge for asset managers, this survey and others like it provide valuable insights to track the change.”
The report titled “The Summit for Asset Management”, explored the evolving role of compliance, regulation, and its implications for the future of the asset management industry.
Some 68 percent of respondents said they anticipated that a large portion of their organisation’s financial resources will be dedicated to compliance in the coming years.
Additionally, 36 percent of asset managers predicted their firm’s compliance budget would account for more than five percent of revenues within the next five years.
When it came to considering the second Markets in Financial Instruments Directive (MiFID II), one in four respondents (25 percent) said it is representative of a significant challenge to their business.
A further 15 percent said MiFID II had impacted the competitiveness of their business.
Other findings from the report conveyed some 76 percent have automated or outsourced at least some compliance functions. And, over half of those polled intended to outsource or automate more compliance functions in the next five years.
Additionally, of the emerging technologies presented, 30 percent said robotic process automation and machine learning would have the biggest impact on the compliance function of their organisations.
The report also found that one in four did not think technology will dramatically alter the compliance function.
James Hatwell, content producer at Osney Media, commented: “The regulatory landscape for asset management has been in constant flux since the financial crisis began a decade ago.”
“As such, it is no surprise that many of our survey respondents believe compliance costs will continue to rise in the coming years. As new technologies begin to take centre stage, firms are presented with both opportunities for cost-savings and additional compliance challenges. It will be interesting to see which firms can make the most of these emerging platforms.”
Bill Haynes, CEO and founder of BackBay Communications,, said: “With the advent of regulations like the General Data Protection Regulation and MiFID II, it’s become clear that many firms are still unsure of how to best meet the ever-changing regulatory standard and what technology’s role should be.”
He added: “These uncertainties also present great opportunities for asset managers to proactively put the processes in place to make the most of what these new technologies and platforms have to offer in terms of client service and engagement. Although it poses a challenge for asset managers, this survey and others like it provide valuable insights to track the change.”
NO FEE, NO RISK
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
