It should come as a surprise to no one that the financial services industry is under a tremendous amount of regulatory pressure. Asset management and asset servicing firms are expected to continue to reduce overall costs while at the same time adhering to ever increasing reporting requirements on behalf of their clients. Providing more transparency to clients means additional cost and risk to asset management firms trying to protect their proprietary processes.
This all begs the question: How is it possible to introduce a myriad of new operational and compliance-related spending to the overall organizational structure in response to the changing regulatory environment, while at the same time reducing expenses and costs?
The Office of the Comptroller of the Currency and the Federal Reserve continue to put pressure on bank-owned service providers to improve their internal procedures and account setup processes. Specifically, many large bank-owned asset servicers have been required to spend years remediating client documentation and revamping both “know your customer” and “anti-money laundering” processes to adhere to ever changing regulations. Additionally, many of those providers have also implemented very costly changes from an operational and systemic standpoint with the goal of providing greater transparency to both the OCC and their clients.