As high as 40 per cent of organizations in the Asia Pacific region are unprepared to address new global regulations with several legal and compliance departments grappling to deal with the complex features of the latest regulations and the rate of change, as per the Facing the future: Developing a response to regulatory change report.
The study had surveyed more than 100 top compliance and legal professionals at financial services and other companies in the Asia Pacific region to measure their perceptions on altering global and local regulatory requirements as a key challenge. About 49 per cent of the respondents worked for companies based in Singapore, followed by Hong Kong with 48 per cent and Australia with 42 per cent.
The survey report was released by risk management firm Asia Risk and Amsterdam-based multinational professional services firm TMF Group. The report found that respondents gave an average score of 6.6 out of 10 when asked to consider the rising volume and complexity of local and global regulations against their level of confidence in their organization’s capability to remain compliant in 2019.
In the report, TMF Group noted that organizations in the Asia Pacific region need to embrace the issue, not because being unable to adhere with the new global regulations will be likely to result in penalties including prison sentences and heavy fines and while a top-down approach is optimal, it is also the responsibility of compliance and legal professionals to appropriately communicate this message throughout the business and give the requisite roadmap towards complete compliance.
TMF Group also noted how compliance responsibilities have surged considerably for Asia Pacific companies in the last half decade, with several countries adopting latest rules and regulations in an attempt to ameliorate international financial transparency.
In the report, TMF Group also said that in the past three to five years, every company has had to adjust and apply resources to cater to the requirements of a more demanding and regulated environment all in the name of transparency, which has been really challenging and even confusing at times and the reason many are required to reach out to companies that can help with comprehending local needs and compliance.
The report also highlighted how data privacy is viewed by Asia Pacific companies as the key regulatory compliance challenge with over 50 per cent of the survey’s respondents naming it first out of the top three challenges faced by their organizations, followed by cyber security threats and ethics.
Amid their lack of preparedness, the report highlighted how the compliance teams across Asia Pacific are mainly optimistic about the impact of the latest international regulation in terms of bringing greater financial transparency to the region with 74 per cent of respondents giving a rating of five or above on a scale of 10 for effectiveness.
The report recommended organizations to go through their records, conduct client communications, garner feedback, generate reports, and update their systems in their attempt to address latest regulations in Asia Pacific. Getting a complete understanding of the latest regulations will be an continuous process in the region, TMF Group highlighted.
