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71% of UK and US Banking Institutions Concerned About Regulatory Processes; AutoRek Reveals

The majority of banking institutions feel they are not well enough equipped to accommodate any further regulatory change from an internal processes perspective; according to AutoRek, a fintech looking to set new standards in financial data automation.

Of 500 banks surveyed by AutoRek across the US and UK, 71 per cent agree that their financial control processes are not robust or flexible enough to accommodate more regulatory change or scrutiny.

The findings come at a challenging time for financial institutions, with several significant regulatory changes due to be implemented over the coming months, including European Market Infrastructure Regulation (EMIR) Refit and revisions to MiFID II.

Aside from the issues firms have reported around their financial control processes, institutions also revealed concerns about their data quality, particularly regarding meeting regulatory reporting requirements.

Overall, 70 per cent of respondents agree that their data lacks the transparency and flexibility required for regulatory reporting. In addition, 73 per cent of firms struggle to receive all the data they require to complete internal and external audits – a concerning finding as auditing season approaches.

Persisting with outdated manual processes

Despite the perceived lack of flexibility in both data and financial control processes, the AutoRek results revealed that the majority of firms still rely on outdated processes across their financial operations.

Murray Campbell, regulatory consultant at AutoRek
Murray Campbell, regulatory consultant at AutoRek

Murray Campbell, regulatory consultant at AutoRek, commented: “Our latest banking industry survey shows that firms are working hard to modernise and adapt to growing competition and cost pressures, but many are still beset by inefficiencies.

“Optimising core back and middle-office functions must be a top priority for banks to streamline operations, get in control of their data and achieve regulatory compliance. We look forward to completing the survey in 2025 to see how respondents have progressed.”

Over three-quarters (78 per cent) of respondents believe their organisation is too reliant on manual tasks and spreadsheets to perform the reconciliation control process. The largest hurdle firms said they face when delivering on digitisation initiatives is integration challenges, which refers to the problems that arise when companies look to harmonize disparate data systems and processes.

Because of this, many firms are reportedly looking to invest in cloud infrastructure (29 per cent), process automation (30 per cent), and reporting solutions (26 per cent), to streamline their back-office operations over the next 12 to 18 months.

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