Auxilion, the leading Irish IT managed services provider, and partner HPE today announce survey findings which reveal that 71% of senior managers in financial services see regulatory compliance as one of the top three challenges facing their business this year.
The study, conducted by Censuswide and involving 200 senior managers working in financial services in Ireland, found that 29% of organisations are not ready to handle more stringent regulations over the next five years. A quarter (25%) also admitted they are not confident their organisation would comply with applicable Corporate Sustainability Reporting Directive (CSRD) requirements.
When it comes to regulation and AI, 26% of respondents don’t believe current regulations around AI in the financial industry are sufficient. Meanwhile, two thirds (66%) believe current regulations around AI in the financial industry are inhibiting its use.
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In terms of wider Environmental, Social & Governance (ESG) considerations, the same amount (66%) believe ESG has a positive impact on the financial performance of financial institutions and some 60% say companies with strong ethical and governance practices suffer fewer regulatory fines. Almost three quarters (73%) say ESG is a priority for their customers.
The leading factors driving financial services firms to adopt ESG are investor or board demand (49%), reputation and branding (48%), risk mitigation (44%), customer priorities (39%), and employee satisfaction (39%). That might explain why 69% of financial services managers have received training relating to ESG and sustainability.
As for the role of tech in this area, some 73% agree that IT is important in helping their organisation achieve ESG goals – with the same proportion (73%) currently using green tech.
As well as investing in green tech, 70% of financial services managers think their organisation should be spending more on compliance risk, governance and management. In fact, 72% are planning to increase their IT managed services investment in the next 12 months and 69% are using or planning to use IT managed service support for governance and compliance purposes.
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However, over two thirds (69%) believe current or upcoming regulatory changes are impacting their investment plans for IT service management. Adding to this, almost a quarter (23%) do not feel the market currently provides for their organisation’s managed services needs.
Eleanor Dempsey, Director of Strategy, Innovation & Transformation, Auxilion, commented: “There are no loopholes or shortcuts when it comes to addressing governance and compliance. Companies – especially those in highly regulated sectors including financial services – must step up their strategies and investments in this area. As well as training people, that means deploying technologies that support ESG efforts.
“Failing to meet such regulatory requirements or embracing ESG not only leaves organisations at risk of financial and reputational repercussions, but it could also have a negative impact on investor and customer relationships. In turn, the performance, growth and future of their business could be in jeopardy.”
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