More than a third of financial services businesses in the UK have been penalised for failing to meet regulatory compliance demands over the past year, highlighting a significant challenge within the industry.
A survey conducted by the specialist financial services consultancy, Consulting at Davies, which involved 501 senior decision-makers from UK-based financial services companies, revealed that 36% of the businesses faced regulatory compliance penalties from June 2023 to June 2024.
The survey pinpointed regulatory compliance as a major hurdle, with 43% of respondents listing it as a current challenge, closely trailing behind economic turbulence at 44%. This underscores the growing complexities and enforcement in the regulatory landscape, particularly in the aftermath of new regulations such as the Consumer Duty introduced in July 2023.
Consulting at Davies’ findings also suggest that the sector believes compliance has grown tougher over the past five years, with 62% of the decision-makers indicating increased difficulty in keeping up with regulations. Moreover, 63% have noted significant changes in customer service due to the introduction of Consumer Duty.
Silvia Amoros, co-lead of the firm’s Banking & Markets EMEA practice, stressed the importance of adaptation and external support to navigate these regulatory waters. “The regulatory compliance landscape is constantly evolving, and our research shows just how many businesses in the UK’s financial services industry are struggling to keep pace with the changes taking place. Failure to do so is not only likely to incur significant penalties, but can also bring huge damage to a company’s reputation,” Amoros said.
“Ensuring they have the trust of customers and delivering the best possible outcomes to those customers – whether they are consumers or businesses – is fundamental to the success of any financial services firm, and meeting regulatory compliance demands is central to this.
For a challenge that is so significant, complex and time-consuming, seeking the support of external experts can be an effective method to ensure the business meets obligations while also freeing up time to allow its team to focus on other core business activities.”
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