It is worth noting that the majority of banking institutions go on to feel they are not well enough equipped when it comes to accommodating any further regulatory change from an internal process’s standpoint, says one of the fintech’s that’s looking to set new standards in financial data automation.
Of the 500 banks that have been surveyed by the firm throughout the US and UK, 71% go on to agree that their financial control procedures are not tough enough or flexible so as to accommodate more regulatory alteration or scrutiny.
These findings happen to come at quite a challenging time for financial institutions, with numerous significant regulatory changes that are due to be executed in the coming months, such as the European Market Infrastructure Regulation- EMIR Refit and revisions to MiFID II.
Apart from the issues firms have reported throughout their financial control processes, institutions also went on to reveal their concerns when it comes to their data quality, especially regarding meeting regulatory reporting needs.
A total of 70% of respondents went on to agree that their data does not have the transparency and flexibility that’s needed for regulatory reporting. Apart from this, 73% of firms struggle to get all the data they need so as to complete internal as well as external audits, which is indeed a concerning finding as the auditing season approaches.
Going ahead with outdated manual processes
In spite of the perceived dearth of flexibility when it comes to both data as well as financial control processes, the survey results went on to reveal that the majority of firms still happen to rely on outdated processes throughout their financial operations.
One of the regulatory consultants at a fintech went on to comment that their updated banking sector poll goes on to show that firms happen to be working hard in order to modernize and also adapt to the rising competition along with cost pressures, but many happen to be still beset due to inefficiencies.
Making utmost use of core back and middle-office functions should be a top priority for banks so as to streamline operations, get control of the data, and also achieve regulatory compliance. They look forward to completing the poll in 2025 and thereby seeing how respondents have progressed.
More than 78% of the respondents go on to believe that their organization happens to be too reliant when it comes to manual tasks as well as spreadsheets to perform the reconciliation control process. The largest barrier firms said they happen to face while delivering on digitization initiatives are integration issues, which refer to the complexities that go on to arise when companies seek to harmonize disparate data systems as well as processes.
Due to this, many firms are reportedly wanting to invest in cloud infrastructure – around 29% of them to be precise, process automation at 30%, and reporting solutions at 26% so as to streamline their back-office functions in the next 12 to 18 months.