Chinese Firms Invest More in Compliance Than Global Counterparts

Over the past two years, Chinese financial services firms have invested more in compliance than their global counterparts, according to research from SunGard.

In a survey of 85 China-based financial services executives, SunGard found that 70.6% have increased compliance staff, compared to the global average of 53.6%. However, in China, 42.4% have invested in new technology to deal with regulatory pressure, lower than the 52.4% average globally. Yet 84.7% of the respondents in China also plan to spend more on technology in the next two years, which is higher than the global average.

Chinese respondents also place higher emphasis on compliance in terms of the fact that 69.4% of respondents approach compliance as a strategic exercise that can support their wider business goals, compared to the global average of 52.8%. Yet only 21.2% in China view themselves as “highly ready” for coming regulatory change. However, Chinese firms are arguably on the right track, as 58.8% classified themselves as “moderately ready.”

The research found that Chinese financial services firms are concerned that regulatory failure can lead to loss of clients, reputational damage and closer regulatory scrutiny. And for over a third (35.3%), regulatory change has limited their ability to invest in new growth opportunities.

“Regulatory change will remain an ongoing challenge for the businesses in China,” says Richard Zhu, country manager for SunGard in China. “What is encouraging is that we are seeing a clear trend of deployment of flexible and proven solutions that support ever-growing regulatory changes. This helps organizations focus on their core business activities and build strong competitive advantages.”