TheCityUK has published the results of research it carried out with PwC UK that shows firms are spending increasing amounts on compliance. Conclusions, based on indepth interviews with 19 CCOs and a targeted survey, include:
- annual compliance costs across the financial services sector of over £33.9 bn – or 13% of annual average operating costs;
- 84% of respondents said their compliance costs had increased or significantly increased over the past 5 years;
- over half of the respondents with operations outside the UK said the UK’s costs are high compared to other jurisdictions;
- firms tend to underestimate by a significant amount what the true cost of compliance actually is.
The report calls for a systematic review to simplify rulebooks and for the regulators better to embed proportionate and supportive supervision. Firms could also help themselves by seeing compliance transformation as a strategic enabler for the business supported by senior leadership, and embracing AI and technology to make efficiencies.