Asian Bank Executives Fret About Regulatory Flexibility

Tom Burroughes

1 April 2019

A study of senior finance, risk and data executives around the world finds that Asia-Pacific senior managers think they are less able to handle regulatory change than their European and North American peers.

Asian banks appear in some ways to be more digitally savvy than those in other regions, but they lack an ability to adapt to regulatory changes. This shows few signs of abating, according to a study by Asia Risk, the publication, and , the technology firm. The organisations polled 117 senior figures in Asia, while 50 executives in the US and Europe were surveyed.

"For banks, the ability to see, know and balance the way they are performing and complying with regulations is mission-critical to their current operations and to every single decision and action they take to move forward. Our survey highlights how Asia-Pacific banks are struggling to overcome the challenges with cost, risk and finance, regulations and the complexity of managing data," Sonny Singh, senior vice president and general manager, Oracle Financial Services, said.

Poor communication between finance and risk functions, and divisions within banks is a drag on performance and hampers the ability to profit from efficient data usage, the study found.

"The presence of a single data source for risk, finance and accounting enables banks to perform timely analysis and reporting based on current and future scenarios," said Stuart Houston, banking innovation advisor, agile finance and risk, Oracle, said. "This could bring significant enhancement of current reporting, allowing financial institutions to concurrently perform risk and financial calculations for financial, management, and regulatory reporting from a single, unified source."

Some 70 per cent of respondents said they rated better organisational alignment as critical or very important. Some 20 per cent of APAC respondents say their activities are boxed inside walled-off business segments – aka “siloed” - compared with only 2 per cent among banking executives surveyed in the US and Europe.

Only 25 per cent of banks with more than $500 billion assets say they are fully aligned. For smaller banks, 50 per cent think they have full alignment between the risk and finance functions.

One-third (34 per cent) of executives in APAC see the opportunity for improved insight and clarity compared with over half (52 per cent) in more developed markets.