A decade on from the start of the global financial crisis, a greatly altered international regulatory landscape faces global corporates
Compliance, fintech, regtech, cyber crime and financial reforms in China will be the top regulatory priorities for firms in Asia Pacific this year, according to Thomson Reuters.
The latest report from Thomson Reuters’ regulatory intelligence expert, Niall Coburn, suggested 2017 will be a positive year for the Asia-Pacific region as it is set to benefit from the political and regulatory uncertainty in the UK, Europe and the Americas.
The report explains that this is because international firms will be looking for stability, and the Asia-Pacific region can meet that requirement better than anywhere else.
Coburn told StrategicRISK that the major take-homes for Asia-Pacific’s risk managers from this report include that risk culture and consumer protection should be internal priorities for firms this year.
“Short term goals cannot be sacrificed for customer interests, market share or growth,” warned Coburn.
“In the next five years, longevity in the marketplace will be determined by the level of integrity by organisations and the way they treat customers and how customer complaints are addressed. Customers are looking for value and service.”
As for the changes risk managers need to directly action this year, Coburn said the most immediate issue for organisations is to ensure they are properly tackling “risk culture”.
“The Board and senior managers must be effectively setting the ‘tone’ from the top, not talking about it, so all staff fully understand the conduct and level of integrity expected of them,” he said.
“Some firms are conducting whole of organisation ‘risk culture’ courses to ensure everyone is on the same page and fully understand expectations.”
Coburn said a heightened level of risk culture and conduct risk understanding by staff can only improve the future conduct and performance of an organisation and make it more effective and customer-focused.
“ Although financial firms state that they are making head way in regaining public trust, their own staff still think there is some way to go yet,” Coburn said.
To illustrate this Coburn explained that at the ASEAN Regulatory Summit in 2016, 65.5 percent of delegates thought the culture in the financial service industry still put the bottom line ahead of ethical behaviour and “doing what is right.”
“We are not out of the woods yet, so far this year historic challenges continue to emerge within financial services organisations in Asia such as, breach reporting, ineffective AML compliance, mis-selling products and continued failures to align the interests of customers with those of the organisation,” Coburn added.
“When mistakes are made, organisations are still slow to mediate with customers faster and more effectively.”
Coburn’s 10 regulatory insights for Asia-Pacific in 2017
1. Risk culture
2. Management accountability
3. Aligning interests of customers with those of the organisation
4. Anti-money laundering (AML): STR processes, beneficial ownership and trade-based finance
5. Regulatory governance
6. Cyber resilience
8. Whistleblowing procedures
9. Fintech and regtech
10. Incentive fraud and remuneration.