The majority of banking institutions feel they are poorly equipped to accommodate further regulatory change from an internal processes perspective. Specifically, 71% say their financial control processes are not robust or flexible enough to accommodate more regulatory change or scrutiny. The findings come at a challenging time for financial institutions. Several significant regulatory changes will be implemented over the coming months, including EMIR Refit and revisions to MiFID II.

Aside from issues firms report around their financial control processes, institutions also have significant worries around their data quality. This is particularly the case with regards to meeting regulatory reporting requirements. Some 70% of respondents surveyed by Autorek say their data lacks the transparency and flexibility for regulatory reporting. In addition, 73% of firms struggle to receive all the data they require to complete internal and external audits. According to Autorek, this is a concerning revelation given auditing season is fast approaching.

Integration challenges beset delivery of digitisation initiatives

The results also reveal that the majority of firms still rely on outdated processes across their financial operations. 78% of respondents believe their organisation is too reliant on manual tasks and spreadsheets to perform the reconciliation control process. The largest hurdle firms said they face when delivering on digitisation initiatives is integration challenges. This refers to the problems that arise when companies look to harmonise disparate data systems and processes.

It is unsurprising that many firms are reportedly looking to invest in cloud infrastructure (29%), process automation (30%), and reporting solutions (26%), to streamline their back-office operations over the next 12 to 18 months.

Murray Campbell, Regulatory Consultant, AutoRek, said: “Firms are working hard to modernise and adapt to growing competition and cost pressures. But many are still beset by inefficiencies. Optimising core back and middle-office functions must be a top priority for banks to streamline operations, get in control of their data and achieve regulatory compliance. We look forward to completing the survey in 2025 to see how respondents have progressed.”

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