Australia's technology-focused banking and financial sector is preparing to launch a major initiative to address dozens of internal reporting platforms following the Royal Commission's reprimand of senior executives.
However, there is growing evidence that significant investments in the current priority compliance technologies could result in more productive and profitable investments in the short and medium term to appease increasingly powerful regulators, the sellers are already caught in the crossfire.
The Commonwealth Bank was the first major institution to warn the market that it was changing its development objective to reflect the fallout from the Royal Commission. Chief Executive Officer Matt Comyn told institutional investors that 64% of the CBA's investment is now "against regulations and compliance." . "
Comyn also told investors that the extra work would be essentially absorbed by existing resources rather than by adding a high cost to the project.
"We have always said up to now that we do not expect a large-scale investment that should be announced. Of course, some of this productivity and cost reduction will require investment over time. "
While the problems faced by the CBA with regulators such as AUSTRAC have been well known, one of the major problems with compliance technologies is that they do little to increase productivity or productivity. profitability of institutions, unlike other projects.
The CBA is not alone in highlighting the high costs and low return on investment in compliance technology spending.
Last week, Owen McMahon, director of ANZ's GDPR program for the corporate database division, warned that the European requirements regime "is difficult and expensive, especially for large, complex organizations" .
McMahon wrote on the ANZ business blog that the GDPR was "the long arm of the data police" and asserted that its requirements were responding to "invasive data use", but that They were needed.
"While the cost of compliance is high, improved data privacy practices will lead to increased customer confidence. People need to be confident that the data they provide will be securely stored and processed fairly, "said McMahon.
He considers consumer confidence as his own reward.
"Banks are uniquely positioned to build that confidence by focusing on strict compliance and secure technology."
But these views are a comfort to technology service providers who until recently had a dream with banks.
Monday, the computer services company DWS specifically criticized the Royal Commission a heavy fall on the part of the financial sector.
In its semi-annual presentation of results published at the ASX, DWS attributed the drop in banking and financial sector revenues – its most important business sector – to the Hayne Banks survey.
"Demand for banking and finance [was] DWS told investors that the financial services contribution was 43% in the first half of 2018 compared to 36% in the first half of 2019.
Whatever your point of view, the repercussions of the Royal Commission should extend beyond the banks.