Financial firms at risk of MiFID II penalties
06 July 2018 New York
Image: Shutterstock
Some 40 percent of financial firms are at risk of penalties related to the Second Markets in Financial Instruments Directive (MiFID II), research from TeleWare has revealed.
Teleware’s research showed that only 60 percent of employees in the financial services sector have suitable processes and technology in place to capture, record, and retrieve real-time business communications.
This means that 40 percent of firms are at risk of non-compliance with article 16 of MiFID II, which could result in fines of up to €5 million, or 10 percent of a firm’s annual turnover.
According to Teleware, whilst compliance can be seen as a necessary evil, there are benefits available to firms.
Employees answering a Teleware survey said that if they could record and recall information more effectively, this would benefit the business by 58 percent in improved customer experience.
Additionally, 55 percent of survey participants agreed that it would improve customer service, and 54 percent said that it would improve employee productivity.
A further 36 percent said that it would increase collaboration across the business, the survey revealed.
Steve Haworth, CEO of TeleWare, commented: “Financial services firms have been dealt a tricky hand in 2018, with MiFID II and the EU’s General Data Protection Regulation coming into force just months apart. And with some contradictory requirements when it comes to the recording of personal data.”
“As the threat of non-compliance is so high, it’s critical that firms make the necessary investments in technology and infrastructure.”
He added: “Ensuring all employees have the tools to be compliant. Our research has shown that firms that do so will reap significant benefits in return, in addition to mitigating the compliance risks.”
Teleware’s research showed that only 60 percent of employees in the financial services sector have suitable processes and technology in place to capture, record, and retrieve real-time business communications.
This means that 40 percent of firms are at risk of non-compliance with article 16 of MiFID II, which could result in fines of up to €5 million, or 10 percent of a firm’s annual turnover.
According to Teleware, whilst compliance can be seen as a necessary evil, there are benefits available to firms.
Employees answering a Teleware survey said that if they could record and recall information more effectively, this would benefit the business by 58 percent in improved customer experience.
Additionally, 55 percent of survey participants agreed that it would improve customer service, and 54 percent said that it would improve employee productivity.
A further 36 percent said that it would increase collaboration across the business, the survey revealed.
Steve Haworth, CEO of TeleWare, commented: “Financial services firms have been dealt a tricky hand in 2018, with MiFID II and the EU’s General Data Protection Regulation coming into force just months apart. And with some contradictory requirements when it comes to the recording of personal data.”
“As the threat of non-compliance is so high, it’s critical that firms make the necessary investments in technology and infrastructure.”
He added: “Ensuring all employees have the tools to be compliant. Our research has shown that firms that do so will reap significant benefits in return, in addition to mitigating the compliance risks.”
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
.jpg)