Covid-19 changes compliance priorities

The Covid-19 pandemic has proved a challenge for financial industry compliance staffers who have had to adjust monitoring and alert coverage to adapt to the remote work transition during extreme market volatility, according to a Nasdaq survey.

For its latest global compliance survey, carried out with Greenwich Associates, Nasdaq quizzed more than 200 professionals, who for the first time cite external global factors as the primary driver of process changes, surpassing regulatory scrutiny.

Market manipulation and alert management are cited as the two most important trade surveillance requirements for 63% and 54% of respondents respectively.

Nearly a third of respondents report budget increases in 2020 and expect this trend to continue in 2021. While vendor platform investments remain a priority, budgets were re-directed to core technology functionality, and planned investments in innovation were put on hold. Next year, there is expected to be a shift towards investment in data quality.

Meanwhile firms are shoring up internal expertise, with compliance personnel hiring expected to increase in 2021, with a focus on analyst-level professionals.

Meanwhile, 68% say that reputation management is the most important mandate of compliance departments, while 67% have dedicated resources specifically to manage reputational risk. Understanding the impacts of regulations continue to be a key concern for 48% of respondents, a number that has remained effectively unchanged since the survey’s inception.

Valerie Bannert-Thurner, SVP, head, buy-side and sell-side solutions, market technology, Nasdaq, says: “Year on year, the findings of the annual Global Compliance Survey typically show regulatory hurdles being the major factor in compliance planning and practices – but this year is different.

“In our latest report, there is a notable increase in unplanned trade surveillance technology spending, as firms continue to adjust their processes and priorities to remain resilient, and to uphold the integrity of the financial markets during the global pandemic.”

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