More than a third of financial services firms in the UK have been penalised at least once in the past 12 months for failing to meet regulatory compliance demands, according to a new study by Davies.
A survey of 501 senior decision makers found that 36% of businesses faced penalties between June 2023 and June 204.
A further 62% said the challenge of keeping up with regulatory compliance requirements has grown more acute over the past five years, with a similar number (63%) noting that the introduction of Consumer Duty in July 2023 has led to changes in the way they serve customers.
Against this backdrop, Davies said regulatory compliance had become the second greatest challenge cited by businesses (43%), just behind economic turbulence (44%).
Silvia Amoros, co-lead of banking & markets EMEA practice at Davies, said firms are struggling to keep pace with the constantly evolving regulatory landscape.
Amoros said: “Failure to do so is not only likely to incur significant penalties but can also bring huge damage to a company’s reputation.
“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.”
