Financial institutions across the world are increasingly turning to technology to manage a growing number of digital threats and regulatory requirements.
That is according to a global survey of compliance officers by consultancy firm Accenture, which finds that technology transformation is the top spending priority for 2018, cited by a quarter of respondents.
A whopping 89% intend to increase investments over the next two years, with cyber security ranked the top compliance risk, followed by data protection and privacy.
This is thought to reflect a growing concern around the introduction of General Data Protection Regulation next month, with firms potentially facing fines of up to 4% of annual revenues and criminal penalties.
“Time has run out for compliance departments that want to take a more watchful, cautious stance toward innovation,” Accenture senior managing director, Steve Culp, said.
“As financial institutions manage more digital threats and an evolving regulatory landscape, they must act quickly and embrace a new mindset driven by innovation across technology, talent and operating models.”
The survey involved questioning 150 compliance officers at insurance, banking and capital markets institutions across 13 countries in Europe, North America, South America and the Asia-Pacific.
It was found that three-quarters believe their organisation has a skills gap between what they have and what is needed to comply with regulation and digital threats using data and analytics.
One-third of respondents cited data quality issues as a significant barrier for transforming compliance over the next three years, with Accenture urging firms to address this to ensure returns on technology investments.
“Strategic investments in enterprise-wide regulatory technology and intelligent automation must be complemented by the right talent mix,” Accenture managing director, Samantha Regan, said.
“If compliance professionals don’t understand the ecosystem of risks they face or fail to obtain strategic insights from the data gathered, they can expect limited returns on their investments.”
There were a record 66 InsurTech investment deals recorded in the first quarter of this year as insurers continued to look to start-ups to improve their claims handling and underwriting excellence.
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