Executives Are More Concerned on Financial Compliance – Ernst & Young
A new survey carried out by Ernst & Young indicated that financial compliance tops the significant concerns of most senior finance executives.
Over 500 leading board members surveyed by Ernst & Young in the recent G20 summit this month raised concerns over the added burden of compliance costs facing their companies. They said that although global coordination in the finance sector is necessary, there should also be a reconsideration of the rules and regulations.
The survey revealed that 35 percent of respondents felt the possibility of another financial crisis loomed far because of the adequacy of the financial compliance of their country. Confidence levels fell down even further as only 25 percent of respondents from UK believed their country’s current strategies are sufficient.
Marcel Van Loo, EMEA banking and capital markets leader at Ernst & Young, commented on the results, saying the probable reason for the dwindling confidence among finance executives on financial compliance could be pinned down to the “challenges of implementation and the potential for unintended consequences.”
Increased regulation from Basel III reforms could bring profits “significantly lower,” said 53 percent of the respondents. Over 62 percent said they have started increasing the costs of their financial compliance while 59 percent have equipped themselves of necessary risk management spending commitment.
Van Loo also noted that the reduced confidence among the respondents has been fueled by “heavy burden” from risk management and lower profitability. He said that authorities have to “grapple with very complex global issues regarding systemic cross-border institutions” that would require much effort and time.