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Thomson Reuters, a leading provider of business information services, has found financial services companies are likely to face radical change in the wake of the pandemic, and may be forced to adopt greater changes in staff management, governance, strategic direction and culture.
The recently released Thomson Reuters Cost of Compliance 2021 Report foreshadows a more flexible and agile vision will need to be adopted, in light of competing and changing pressures.
Thomson Reuters found that while the pandemic presented the financial services industry and compliance officers with many opportunities, there were also additional challenges.
The report shows compliance officers now need to build on the changes the pandemic created.
It found around one-third (34 per cent) of firms currently outsource all or part of their compliance functionality. This is mainly caused by additional assurance on compliance processes, a lack of in-house compliance skills, and the need to access third-party know-your-customer functionality.
Financial services firms will still need to ensure their approach is strategically aligned with that of their organisation, especially in relation in the uptake digital technology solutions and outsourcing compliance functions.
Thomson Reuters senior regulatory intelligence expert Susannah Hammond believes the right resources are vital.
“Without sufficient resources, management will be unable to achieve the organisation’s objectives and the same can be said of the compliance department,” said Ms Hammond.
“The underlying drivers for changes made within a firm during the pandemic are important. Compliance officers must now consider the future of those changes and assess directionally what should be maintained and which are due for revision post-pandemic”.
“Part of this analysis is understanding the limitations of what can, and cannot be, changed.”
Since the peak of the pandemic, the report found cost and operational obstacles as the main challenges faced by company boards in the past year.
Successful change will now require companies to seek new ways to reduce cost and maximize revenue.
Compliance officers will also have to keep up with the more stringent regulatory demands and expectations, amid ongoing political changes adding further uncertainty.
Other key findings from the report include:
The Thomson Reuters Compliance survey reflects the views and concerns from interaction with the financial services industry and candid concerns shared by practitioners.
The report focused on the challenges the compliance functions at financial services companies expect to face in the coming year.