COVID-19 Causes 25% Spike in Compliance & Risk Outsourcing
- Compliance , Risk Management
- 09.10.2020 02:57 pm
ACA Compliance Group (ACA) has identified a global spike in financial services firms turning to RegTech, outsourcing, and operational resilience solutions for risk and compliance management in the age of COVID-19. The firm has seen a 25% rise in demand for outsourced managed services when compared with pre-pandemic levels, with cybersecurity and RegTech solutions also seeing an increase in demand. A key driver is that risk and compliance leaders are being asked to do more with less and reduce costs while enhancing operational resilience.
The COVID-19 pandemic has forced financial services firms to abruptly change the way they work now – and in the future. As the global pandemic mutated into an economic crisis, it caused massive unemployment and social unrest.Fires and floods added additional environmental crises to the mix.All of these risks interacted and mutated to present firms with key risks and challenges, including business disruption, remote work, cyber threats, and ultimately risk and compliance monitoring challenges. At the same time, firms are seizing the chance to invest in new opportunities created by the disruption and to modernize their infrastructure to be more resilient, both of which will serve them well in the future. This is a phenomenon that ACA has termed RiskMutationTM.
A survey of nearly 800 companies recently conducted at ACA’s Fall 2020 Virtual Conference revealed that increased risk and compliance pressures are set to be a continuing trend, with one in three firms planning to outsource one or more compliance, operational, or cybersecurity-related tasks in the next two years. 65% of the firms polled also believe that their cybersecurity and privacy functions will require the biggest increase in compliance and risk management services in 2021.
Carlo di Florio, Global Chief Services Officer, ACA Compliance Group, said: “RiskMutation challenges risk and compliance professionals to rethink how their jobs are done. For financial services firms, this accelerates the need to modernise and rethink their risk and compliance operating models. Key to success is how well leaders leverage technology, outsourcing, and operational resilience strategies to do more with less and successfully navigate RiskMutation. These capabilities help firms build adaptability, scale, and resilience into their processes and culture in order to quickly respond to rapidly evolving circumstances.”
ACA’s guidance is for firms to implement three key strategies:
- Leverage technology to transform risk and compliance functions while delivering significant cost savings of up to 60%
- Outsource to achieve better results, increased agility, and scale, while reducing costs up to 50%
- Build operational resilience to manage cyber threats, business disruption, and third-party risk across the enterprise and beyond
Visit www.riskmutation.com to find out how and why RiskMutation is reshaping the future of risk and compliance management. This report sets forth strategies for navigating RiskMutation, along with supporting business cases and roadmaps to assist firms in the journey.
Watch an on-demand recording of the conference session: The Future of Risk and Compliance and in the Age of RiskMutation.