Duff & Phelps survey shows top financial services executives see benefits to regulation

NEW YORK (April 19, 2018) – According to the sixth annual Global Regulatory Outlook report published by Duff & Phelps, the global advisor that protects, restores and maximizes value for clients, the financial services industry is seeing some benefits to current regulations, although the industry is dubious that current regulations are sufficient to prevent another crash.

For its 2018 survey, Duff & Phelps surveyed 124 senior financial services executives from across the globe, and published the full results here.

The results were surprising:

  • 51 percent said that financial services regulation will increase market stability, up from 42 percent in 2017.  Forty-six percent said that regulations will help increase investor confidence.
  • Forty-three percent view the impact of the Yates Memo positively.
  • A full 73 percent said that regulations will encourage them to improve internal systems and controls, albeit at increased costs, which 95 percent are expecting.
  • Twenty-four percent said they already expect to spend more than 5 percent of revenue on compliance by 2023; more than one-tenth (11 percent) expect to spend more than 10 percent of revenue by that time.
  • Only 29 percent think that regulators have established consistent global standards, which one in five (19 percent) say is the single most important factor in a global regulatory system.  Still, 52 percent said that regulators are improving their ability to coordinate globally.
  • However, 85 percent said that regulatory changes have only partly or not at all created adequate safeguards to prevent a crash.

“Even while the limits of regulation are widely recognized, the increased confidence in the effectiveness of regulation may reflect a growing cultural shift in the financial services industry,” said Julian Korek, Managing Director and Global Head of Compliance and Regulatory Consulting at Duff & Phelps.  “What firms still want most is harmonization, ostensibly to reduce the complication and cost of complying with different standards across jurisdictions.  But, given the tendency for regulatory alignment to level up without reducing duplication, it remains unclear whether greater consistency would in fact reduce or add to the cost of compliance.  Firms should be careful what they wish for.”

About Duff & Phelps

Duff & Phelps is the global advisor that protects, restores and maximizes value for clients in the areas of valuation, corporate finance, disputes and investigations, compliance and regulatory matters and other governance-related issues. Our clients include publicly traded and privately held companies, law firms, government entities and investment organizations such as private equity firms and hedge funds. We also advise the world’s leading standard-setting bodies on valuation and governance best practices. The firm’s nearly 2,500 professionals are located in over 70 offices in 20 countries around the world. For more information, visit www.duffandphelps.com.

M&A advisory, capital raising and secondary market advisory services in the United States are provided by Duff & Phelps Securities, LLC. Member FINRA/SIPC. Pagemill Partners is a Division of Duff & Phelps Securities, LLC. M&A advisory, capital raising and secondary market advisory services in the United Kingdom are provided by Duff & Phelps Securities Ltd. (DPSL), which is authorized and regulated by the Financial Conduct Authority. M&A advisory and capital raising services in Germany are provided by Duff & Phelps GmbH, which is a Tied Agent of DPSL. Valuation Advisory Services in India are provided by Duff & Phelps India Private Limited under a category 1 merchant banker license issued by the Securities and Exchange Board of India.

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