Omega Systems’ Insights into Regulatory Pressure & Compliance Fatigue in Financial Services
Omega Systems, a key player in managed IT and cybersecurity services, has recently published a compelling report titled Regulatory Pressure & Compliance Fatigue in Financial Services. This study delves into the growing challenges faced by the financial sector due to rising regulatory demands and the limitations of existing compliance tools. By surveying over 300 U.S. financial services executives, Omega sheds light on an industry grappling with a myriad of pressures.
The Compliance Challenge: Evolving Regulations
According to the report, 42% of respondents cite the struggle to stay updated with evolving regulations as their major compliance hurdle. This sentiment highlights a pervasive sense of uncertainty within the financial services realm, where rules and standards are in a state of flux. The complexity of these regulatory frameworks not only creates anxiety among compliance teams but also jeopardizes the integrity of operations.
Moreover, more than a third (36%) of executives admit that they lack the necessary internal expertise to navigate these regulatory landscapes. This knowledge gap underscores a significant risk for organizations in an increasingly scrutinized environment.
Manual Processes: A Barrier to Progress
The findings reveal a staggering reliance on outdated methods for compliance tracking. A substantial 54% of firms continue to use spreadsheets or home-grown systems for their compliance efforts. This level of manual oversight is concerning, as it opens the door to documentation errors and creates gaps in audit trails, which regulators are apt to identify during assessments.
Such manual processes not only hinder real-time visibility into compliance efforts but also slow the overall audit process. In a world where speed and accuracy are of the essence, this reliance becomes a significant drawback.
Misalignment Between CFOs and CIOs
The report further explores the disconnect between financial and technical leaders, noting that 53% of CFOs view evolving regulations as a primary concern compared to just 38% of CIOs. This disparity suggests a lack of cohesive strategy between financial management and IT departments, which is crucial for effective compliance. When these two factions are not aligned, the potential for conflict and miscommunication increases, leading to further compliance fatigue.
Risks of Legacy Systems
Half of the firms surveyed reveal they operate on outdated or on-premise infrastructure—another risk factor. These legacy systems are often incapable of meeting the modern transparency and documentation needs dictated by regulatory authorities. Thus, firms that cling to these dated systems may find themselves not only struggling to comply but also less competitive in the current landscape.
Automation: A Beacon of Hope
In light of the challenges faced, the report identifies automation as a promising solution. Financial executives recognize the need for modernization, with 51% highlighting data discovery, 45% emphasizing automated evidence collection, and another 45% focusing on document management as critical priorities for improving their readiness for audits and enhancing control visibility.
By embracing automation, firms can alleviate some of the burdens associated with compliance fatigue. It streamlines processes and ensures that documentation is thorough and accurate—essential in reinforcing organizational credibility.
A New Era of Compliance: Proof, Not Policy
Mike Fuhrman, CEO of Omega Systems, articulated a shift in the approach to resilience within financial services: “Resilience used to mean protection. Today, it means proof.” As regulatory bodies and stakeholders seek clearer evidence that firms can defend their systems and comply with regulations, the emphasis is shifting from merely having policies in place to demonstrating those policies effectively.
New disclosure requirements from organizations like the SEC and FINRA mandate that firms not only defend against threats but also provide extensive documentation to exhibit their compliance readiness. This evolving landscape is reshaping how organizations approach compliance, with an increasing focus on verifiable proof.
The Interconnection of Compliance and Cybersecurity
This report builds on Omega’s previous work on cybersecurity resilience, further emphasizing how intertwined compliance and cybersecurity have become in today’s regulatory environment. As organizations populate their compliance and cybersecurity frameworks, they find that integrating automation and managed compliance platforms is paramount for success.
The financial sector, including family offices, RIAs, wealth managers, private equity, and investment advisory firms—which manage assets ranging from $10 million to over $10 billion—are all facing these challenges. Emphasizing modern, automated solutions will allow these institutions to enhance their resilience against both regulatory scrutiny and cyber threats.
Access to the Full Report
For those interested in gaining deeper insights into the financial services industry’s compliance struggles, Omega Systems offers the full report, Regulatory Pressure & Compliance Fatigue in Financial Services. It’s available for download from Omega’s website, serving as a valuable resource for understanding the intersection of compliance, cybersecurity, and IT management in today’s ever-evolving financial landscape.
About Omega Systems
Founded with a passion for delivering excellence in managed services, Omega Systems stands out as a multi-award-winning MSP and MSSP, catering to security-sensitive sectors such as financial services and healthcare. Their robust portfolio offers around-the-clock IT support, effective cybersecurity risk management, and comprehensive disaster recovery solutions, ensuring businesses can operate confidently in the face of ongoing digital challenges.
Explore more about Omega Systems and their offerings by visiting www.omegasystemscorp.com.
