Compliance

03:15 PM
Connect Directly
RSS
E-Mail
50%
50%

Compliance Costs Continue to Rise

Deloitte study shows companies are paying more than ever to remain compliant.

Concern over the rising cost of compliance is merited, reports New York-based Deloitte & Touche's Deloitte Center for Banking Solutions. According to a survey of chief compliance officers, chief risk officers and other senior executives at 20 of the top 50 financial institutions in the U.S., compliance costs are eating up more and more of firms' net income, growing from 2.83 percent of net income in 2002 to 3.69 percent in 2006. Since there are no tangible ways to measure the cost savings or risk avoidance that regulation provides for firms, the spending increase is a tough pill to swallow, Deloitte notes.

One of the primary reasons for the increase in costs, according to Deloitte, is that institutions are responding to regulation by applying human resources to monitor compliance, rather than investing in scalable technology resources to manage the effort. The research report shows that 60 percent of respondents' compliance-related spending in 2006 was on compensation.

Firms must find ways to implement technology alongside business process improvement to break the trend and realize efficiencies in their compliance centers, Deloitte asserts.

Courtesy of Wall Street & Technology, a TechWeb property.

Comment  | 
Print  | 
More Insights
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology Dec. 2, 2014
BS&T's 2014 Elite 8 executives are leading their banks to success, whether it involves leveraging the cloud, modernizing core systems, or transforming into digital enterprises.
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.