Many cite EU and Central Bank rules as key pressure points, as they deal with the increased amount of red tape. Credit unions and insurers say they are experiencing added pressure due to requirements specific to their sectors.
The findings are contained in a survey by the Compliance Institute, a professional body, which spoke to 60 heads of compliance.
It says the research shows that officers are grappling with a rapidly evolving regulatory environment – with the top challenge, cited by 42pc, being the sheer volume of regulation.
The second biggest challenge was pressures related to EU rules, cited by 16pc – and specifically from the Digital Operational Resilience Act (Dora), also mentioned by 16pc of those surveyed.
Designed to improve digital security in the financial services sector, Dora came into effect last January and applies to crowdfunding platforms and credit unions as well as to banks and insurers.
The reality is that compliance teams are under sustained pressure
Simplification is the new buzzword in Brussels, due to a recognition that over-regulation has led to a loss of competitiveness across the EU, with businesses being bound up by too much red tape.
Peter Mandelson, a former European commissioner for trade and now the UK ambassador to the US, recently said that the EU model has turned businesses into “compliance machines”.
Michael Kavanagh, CEO of the Compliance Institute, said: “Regulation is increasing in pace and complexity, stretching teams and systems to their limits.
“While it’s encouraging that nearly two-thirds of organisations feel prepared to meet these demands, the reality is that compliance teams are under sustained pressure.”
The survey also highlights concerns among professionals about the manual nature of compliance processes, with many teams said to be struggling to manage regulatory obligations without tech support.
On the other hand, there has been only cautious adoption of emerging technologies such as AI, with many saying they need clearer guidance, better training and more clarity.
In her first speech as deputy governor of the Central Bank of Ireland, Mary-Elizabeth McMunn last month said the bank had identified ways to simplify the regulatory burden.
However, she warned that simplification cannot be allowed to slide into de-regulation and lower standards – because, done badly, it delivers more costs than benefits.
“The standards cannot become so simple that they do not address complex risks,” Ms McMunn said.
“And the burden cannot be alleviated to the detriment of important information that regulators and the market need to do their jobs.”
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