London/Frankfurt, 23rd May 2018 - At an exclusive C-level event in London yesterday, Chartis Research, the leading provider of research and analysis on the global market for risk technology, and management and technology consultancy BearingPoint, published the results of joint research that examines how financial institutions (FIs) in Europe and the US can allocate, control and ultimately reduce their cost of compliance for Risk Data Aggregation and Regulatory Reporting (RDAR) activities. According to the research report – "Counting and Cutting the Cost of Compliance" – FIs can assess and adjust five key technical ‘levers’ to modify their compliance costs: data centralization, the availability of Application Programming Interfaces (APIs), feed handler standards, the number and diversity of supported reports, and the use of utilities.
The wave of regulation since the financial crisis 10 years ago has been accompanied by high costs for RDAR solutions, and analysts predict that this development will continue. Yet, until now, there were no studies available in the market that enabled financial institutions to exactly quantify the cost of compliance and identify the most worthwhile areas for investment. We believe our study will add a new and valuable dimension to the ongoing debate around compliance costs, at a time of intense cost pressure on financial institutions. Yesterday’s event underscored the scale of the problem faced by institutions, particularly in the front office. We look forward to collaborating further in this critical area of research to help institutions more effectively address their compliance cost challenges.
Rob Stubbs, Head of Research at Chartis
RDAR has been our business focus for 25 years now. With our RegTech, RiskTech and SupTech solutions we enable regulators and firms to increase the efficiency of their regulatory reporting, risk and data management processes. This report allows institutions to benchmark their cost of compliance, identify the main cost drivers, and assess the impact of key IT architectural and operational decisions. One key issue – in line with our experience – is the impact of the rise of reporting utilities, driven by relentless demand on compliance teams to cut costs.
Dr. Maciej Piechocki, Partner at BearingPoint
This new research is based on comprehensive interviews with and analysis of various FIs in Europe and the US. It focuses on RDAR because RDAR accounts for the biggest proportion of FIs’ compliance costs: according to Chartis, the industry-wide cost of RDAR operations and technology is about $70 billion. The scope for savings in this area is enormous.
BearingPoint is an independent management and technology consultancy with European roots and a global reach. The company operates in three units: Consulting, Solutions and Ventures. Consulting covers the advisory business; Solutions provides the tools for successful digital transformation, regulatory technology and advanced analytics; Ventures drives the financing and development of start-ups. BearingPoint’s clients include many of the world’s leading companies and organizations. The firm has a global consulting network with more than 10,000 people and supports clients in over 75 countries, engaging with them to achieve measurable and sustainable success.
About Chartis Research
Chartis Research is the leading provider of research and analysis on the global market for risk technology. It is part of Infopro Digital, which owns market-leading brands such as Risk and WatersTechnology. Chartis’ goal is to support enterprises as they drive business performance through improved risk management, corporate governance and compliance, and to help clients make informed technology and business decisions by providing in-depth analysis and actionable advice on virtually all aspects of risk technology.
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