The high volume of regulatory change affecting the financial services industry has limited the capacity for firms to do business, a report commissioned by technology solutions provider SunGard has found.
Over half of more than 400 executives from around the world surveyed said post-crisis regulatory change – including new rules within the Dodd-Frank Act, Basel III and the European market infrastructure regulation, for example – has impinged the ability to do business.
The report also found half of c-suite executives are highly stressed in dealing with this degree of regulatory change, which has forced firms across the industry to alter business activities.
“One in two respondents warns that dealing with regulatory change has distracted his other firm from core business activities, which may have damaged shareholder returns and companies’ ability to invest for the future,” the report read.
Asked what degree of stress their business is suffering due to regulatory change, 45.5% said ‘high stress’, and 27.8% said this would be the same in two years time.
However, the number one concern of executives polled was not regulatory change, which registered second at 42.8%, but market volatility, with 45% of respondents claiming this as the chief concern presently.
“The definition of what regulators are becoming concerned about is broadening to include areas such as operational risk, adding extra strain to the financial services industry,” said Jeffrey Wallis, managing partner and president of SunGard Consulting Services.
“Our survey demonstrates that executives at the highest levels are struggling to marry ensuring regulatory readiness with maintaining a focus on day-to-day operations,” he said.
The research, commissioned by SunGard, was produced by Longitude Research.