As concerns about regulatory risk and dissatisfaction with support from regulators continue to permeate the Asian financial market, many organizations anticipate an increase in infrastructural investment this year. That’s according to a survey conducted by Wolters Kluwer and Asia Risk, shared with FinTech Finance.
The survey of more than 140 market participants was conducted across a range of job functions, as well as organization types and sizes, across a variety of countries within the Asia-Pacific region. Respondents answered questions about current challenges and concerns in relation to risk management, as well as investment plans in areas such as data management and general technological infrastructure.
According to the survey, the three greatest challenges facing financial organizations operating in the Asia-Pacific region in 2016 are compliance, operational risk management and financial risk management. The specific results vary based on the country, job function and company type surveyed; however, the results highlight the variety of issues faced by financial market participants throughout the region. For instance, financial risk management is viewed as a major challenge for 73% of Asia-Pacific securities firms, as well as 70% of risk managers across all regions. Operational risk management is seen as highly challenging by finance (60%), risk (70%) and IT professionals (100%), according to the survey, as well as by those respondents currently working at asset management companies, insurance firms and, to a lesser extent, hedge funds.
By investing in technology, organizations can, of course, address challenges in areas such as compliance and operational and financial risk management. Among company types, hedge fund employees were most likely to rate their organizational approach as “excellent” (38.5%), otherwise “good” or “adequate” (both 40%). Eighty per cent of those working at securities firms rated their respective organization’s approach to technology as “poor” (47%) or “adequate” (33%); and nearly 60% of asset managers described their organization’s approach as “adequate”.
“The results show that some firms already have automated systems and processes in place, but most organizations have plans for investment in this area in 2016,” explains Paul Lyon, London-based Director of International Corporate Communications for Wolters Kluwer’s Governance, Risk and Compliance Division. “Our survey found that organizations must develop a better attitude towards technology development in order to create the tools and systems that will allow for better management of risk, especially as new regulations strengthen the requirements around reporting and transparency. This would allow organizations to create an internal infrastructure that is not only compliant, but also allows organizations to use new requirements implemented since the 2008 financial crisis to boost performance.”