Duff & Phelps releases 2019 Global Regulatory Outlook

Posted: 03/06/2019

MalinNilsson_DuffPhelpsDuff & Phelps has released its latest annual Global Regulatory Outlook (GRO) report, which found that London is no longer perceived as the world’s preeminent financial centre by financial sector professionals. 

As a result, argues Malin Nilsson (pictured), Channel Islands Managing Director, Jersey and Guernsey must continue to nurture their international connections while maintaining strong links to London.

New York has taken back the title of top IFC, according to the GRO report, which surveys senior professionals in financial institutions around the world. It found that only 36% currently see London as the foremost global financial hub, 17% down from last year. 

New York is now regarded as the world’s financial centre by 52% of respondents, a 10% increase on 2018, with Hong Kong chosen as third most important financial centre by more respondents than last year.

Nilsson commented: “Brexit has cast a shadow of uncertainty over the UK’s world-class financial sector and its ability to dominate other major financial hubs in the coming years. Looking ahead, we see the combined effects of Brexit and the emergence of Asia with respondents expecting Hong Kong to play a bigger role as a leading global financial centre. 

"Financial centres such as Luxembourg and Dublin were also named as potential financial capitals of the future by a smaller number of respondents. Recently, we have seen that Channel Islands firms have been and will be making the most of the opportunities this presents, by diversifying both in the US and Far East, as well as in the EU.” 

GRO_2019The survey also looked at how firms are coping with regulatory compliance challenges. Some of the most pressing issues facing the global financial community this year continue to involve anti-money laundering (AML).

The report highlights that the changes respondents deem will have the greatest effect on AML efforts are better coordination and information-sharing between regulators and industry, rather than front-line activities such as funding at the firm level on AML controls. 

Other report highlights

• While most financial firms rated themselves as effective at AML, 30% of global firms rate at least one of their AML components as being either ‘not at all effective’ or only ‘somewhat effective’
• Nearly a quarter of global firms gave themselves low marks in their internal audit of AML risk, an essential element of AML risk management.

Malin added: “It is certainly the case in the Channel Islands that while firms have become more diligent and sophisticated in their compliance and risk management systems, financial crime continues in a volatile global business environment and there is a growing sense of regulatory fatigue that cannot be overlooked.

"Excellence in compliance begins with a mindset that extends over every aspect of the business, maintaining that momentum of best practice at all levels. Without robust compliance the sector will be vulnerable to risks that are only just emerging.”  

• To view this year's Global Regulatory Outlook click here

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