Heightened regulatory scrutiny is pushing compliance spending up at financial services firms, according to a survey by tech provider SteelEye, which reported that 76% of finserv firms elevated compliance expenditures over the past year.
The survey, part of SteelEye’s annual report on compliance practices, included responses from more than 300 senior compliance decision-makers in financial services firms in the U.S., UK and Europe.
SteelEye’s survey was conducted in February 2023, about a month before the spectacular collapse of Silicon Valley Bank, which sent ripple effects throughout the financial sector, roiling markets and shaking consumer confidence, which SteelEye CEO Matt Smith expects to cause further strain on finserv firms.
“While our report shows that 2022 saw huge progress in the sophistication of compliance technology, as a result of an increase in investment across the industry, this level of investment will need to continue into 2023 to meet the mounting regulatory pressure that is expected in the fallout of the recent events,” Smith said in a news release.
Here are a few other key findings of SteelEye’s analysis:
- 25% of firms said the collapse of crypto exchange FTX reduced their appetite for high-risk alternative assets.
- 77% of finserv companies are investing in ecommunications surveillance, and a quarter view ecomms as their top investment priority.
- Only 5% of firms say their compliance spending dropped last year, and U.S. firms were more likely than those in the UK or Europe to report spending more (87% vs about 70% in other regions).