Banking Industry Compliance Challenges in Greece: Innovation and Efficiency
The Greek banking industry is facing numerous compliance challenges that hinder innovation and efficiency. Despite significant investments in regulatory compliance and risk management over the past decade, banks are now seeking innovative technologies to improve their compliance efforts.
The Need for Advanced Compliance Solutions
A recent study by EY revealed that only 1% of financial crimes are detected globally, with an estimated $1-3 trillion laundered through the financial system annually. This highlights the urgent need for advanced compliance solutions that can detect and prevent financial crimes more effectively.
Innovative Technologies Transforming Compliance
Process automation, new data management tools, artificial intelligence, and machine learning will continue to transform banks in the coming years. These technologies have the potential to improve compliance efficiency, reduce costs, and enhance customer experience.
RegTechs: Partners for Compliance Innovation
Regulatory technology firms (RegTechs) are increasingly partnering with large incumbents to implement advanced compliance solutions. The global RegTech market revenue is forecasted to grow from $1.4 billion in 2018 to $6.4 billion by 2025, according to HTF research.
The Challenges of Regulatory Burdens
While regulatory technology offers promising solutions, participants at the Bank Governance Leadership Network (BGLN) meetings emphasized that regulatory burdens hinder innovation. A report found that:
- 56,321 regulatory alerts were issued by 900 regulatory bodies in 2017, highlighting the complexity and cost of compliance.
- The high costs of compliance are siphoning money from investments in innovation.
Rethinking Compliance Approaches
To improve compliance efficiency, banks need to rethink their approach by:
- Partnering with RegTechs: Collaboration can help implement advanced compliance solutions and reduce costs.
- Including compliance teams early on: Involving compliance teams in strategic discussions can ensure that innovative solutions are compliant from the outset.
Changing Cultural Attitudes towards Compliance
Compliance needs to be included early on in designing and setting up new services, products, or systems. Boards need to make compliance innovation a priority and regular topic of discussion.
Industry Collaboration: A Regulatory Challenge
Despite the benefits of collaboration, industry participants suggested that regulators need to do more to encourage collaboration. The challenges to compliance innovation are significant, but investing in innovation in compliance should be a board-level discussion given the costs involved and the potential for improvements to customer experience.