Financial institutions are wasting billions on regulatory technology without addressing fundamental data ownership problems, according to a new warning from regulatory intelligence leader FinregE. The alert comes as banks continue aggressive spending on RegTech solutions that may be built on faulty foundations.
FinregE is urging firms to resolve critical data ownership gaps before committing further capital to compliance technology purchases. The issue affects banks, asset managers, and financial services providers across the sector who are deploying RegTech systems without ensuring their underlying data infrastructure can support these tools effectively.
The warning highlights a widespread problem where institutions are prioritizing technology acquisition over data quality and governance, potentially rendering expensive compliance systems ineffective. This could lead to regulatory failures despite significant technology investments, exposing firms to enforcement actions and reputational damage.
The timing is critical as financial institutions face mounting pressure to modernize compliance operations while managing escalating regulatory requirements across multiple jurisdictions.
FXnCO Insight
Financial institutions should immediately audit their data governance frameworks before deploying additional RegTech solutions to avoid costly implementation failures and compliance gaps.
Source: Finextra