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Top 5 Takeaways from Nasdaq's Global Compliance Survey

As regulatory focus and the risk of reputational damage loom, compliance teams face a myriad of challenges – from the influx of data sources and signals to monitor to new types of technology to evaluate. How have these areas, and more, impacted compliance in recent years and what key trends should your firm be looking at in 2018?

Each year, Nasdaq, in collaboration with Aite Group, runs a Global Compliance Survey to gather intelligence on the most pressing developments in surveillance and compliance over the past and coming 12 months.

This year’s survey responses included 123 compliance personnel spanning over 90 firms throughout the financial services sector across 24 countries.

Key trends identified for 2018 were:

1.Compliance influence within firms continues to grow

Similar to previous years’ results, the influence of compliance continues to grow within firms – with compliance standards considered highly important by 92% of respondents. In fact, the percentage of respondents who agree that compliance is part of the conversations about their firm’s strategic direction moving forward significantly increased between 2016 and 2017, from 75% to 85%.

2.Protecting firms’ reputation remains the key function of compliance

For the third year in a row, protecting firms’ reputation was reported to be the key function of compliance, with reputational risk trending at an even higher importance level throughout the past year.

This year’s survey data reflected an increase in buy-side respondents that noted upholding and protecting their firm’s reputation as the most important compliance function. This further demonstrates the convergence of the buy-side toward sell-side levels. Greater compliance interest on the buy-side can be largely attributed to the increasingly competitive investment environment and growing need for buy-side firms to demonstrate transparency to maintain their client base. On the sell-side, responses remained largely the same, highlighting that reputation remains the top priority.

3.Compliance budgets remain healthy

When looking at year-over-year comparisons, compliance spending remains extremely healthy – perhaps even more so than anticipated. While many firms have already spent significant sums on their compliance programs, they are expected to continue to invest in the coming 12 months. Between 2016 and 2017, 56% of survey respondents reported spending increases – almost on par with the increases predicted in the 2016 survey.

In regard to where these budget increases are being allocated, surveillance technology will continue to be the major category. Surveillance technology has consistently been reported as the most popular budget allocation area for the past three years. In addition to being the number one allocation overall, surveillance technology is consistently the main spending allocation across individual firm types.

4.Utilization of disparate surveillance systems has decreased significantly

Most firms are moving away from a multiple-vendor surveillance approach, as the utilization of multiple trade surveillance systems has decreased significantly. Notably, there was a significant decrease this year, from 24% to 12%, in the number of respondents who noted that utilization of 3 or more systems to investigate a potentially abusive incident was extremely challenging. This can be directly correlated to the reduction in vendor utilization.

5.RegTech is overtaking RegEd as top compliance concern

The most notable difference in the 2017 data is the rise of RegTech, which is overtaking RegEd as the top compliance concern. Between 2016 and 2017 there was an 18% increase in the number of respondents who noted technical inability or lack of technology capabilities to meet requirements as their top concern over the next 12 months. Furthermore, the overall industry focus on RegTech solutions has yielded marketplace results, as firms are scrambling to keep up with available technology.


To learn more about key findings from this year’s Global Compliance Survey, download the full report here: http://nasdaqtech.nasdaq.com/SMARTS2017-GCS

Or view our webcast recap here: http://nasdaqtech.nasdaq.com/1802-GCS-WBR-DWLD

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.