A new study by Davies involving over 500 senior decision-makers in UK financial services businesses has revealed the following insights:

  • 36% of UK financial services businesses reported being penalized at least once in the past 12 months for failing to meet regulatory compliance demands.
  • 62% of respondents indicated that the challenge of keeping up with regulatory compliance requirements has intensified over the past five years.
  • 63% noted that the introduction of the FCA’s Consumer Duty in July 2023 has prompted changes in how they serve customers.

The specialist financial services consultancy division of Davies, Consulting at Davies, commissioned an independent survey of 501 senior decision-makers within UK-based financial services companies. The survey found that 36% of these businesses faced regulatory compliance penalties between June 2023 and June 2024.

Among the challenges listed, regulatory compliance was the second most frequently cited challenge (43%), just behind economic turbulence (44%).

Additionally, Consulting at Davies’ research highlighted that over three-fifths (62%) of decision-makers in the financial services sector believe it has become increasingly difficult to keep up with regulatory compliance requirements over the past five years. Furthermore, 63% stated that the introduction of Consumer Duty in July 2023 has led to changes in customer service practices.

Silvia Amoros, co-lead of the firm’s Banking & Markets EMEA practice, said: “The regulatory compliance landscape is constantly evolving, and our research shows just how many businesses in the UK’s financial services industry are struggling to keep pace with the changes taking place. Failure to do so is not only likely to incur significant penalties, but can also bring huge damage to a company’s reputation. 

“Ensuring they have the trust of customers and delivering the best possible outcomes to those customers – whether they are consumers or businesses – is fundamental to the success of any financial services firm, and meeting regulatory compliance demands is central to this. For a challenge that is so significant, complex and time-consuming, seeking the support of external experts can be an effective method to ensure the business meets obligations while also freeing up time to allow its team to focus on other core business activities.”