Traditional financial institutions are recognizing the importance of digital transformation. While digital enablers continue to gain traction in the financial services industry, organizations are still struggling to adapt to digitalization.
FREMONT, CA: Trade regulatory obligations have risen in recent decades. While the increasing restrictions are designed to safeguard investors, they are ultimately resulting in higher compliance costs and manual labor.
Global spending on compliance and regulation is close to $270 billion, with regulatory compliance accounting for 10 To 15 percent of the workforce in financial firms. Over the last decade, authorities have encouraged financial institutions to modernize their operations, and many of them have battled with regulatory-driven reforms.
While shifting regulations are unpredictable, industry stress on financial organizations is increasing and placing a toll on their earnings.
Challenges that drives regulatory costs are-
Digital Drama
Traditional financial institutions are recognizing the importance of digital transformation. While digital enablers continue to gain traction in the financial services industry, organizations are still struggling to adapt to digitalization.
In contrast to traditional approaches, the customer-friendly UI and frictionless digital process contribute to high income through greater adoption. However, the costs associated with the digital transition are plunging, forcing many financial organizations to stick with the traditional error-prone techniques.
Domain Expert Resources
The system can perform anything, but domain expertise is required to educate the system and anticipate regulations. Few organizations rely on outside researchers for industry involvement. Many large financial institutions spend exorbitant fees for research and subject expertise consultation. For example, Europe's MiFID II regulates external research spending, which must be reported as research unbundling reports. Domain expertise is thus the new black.
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