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The impact of technology and regulation on funds

As regulatory demands grow, compliance costs rise. No one doubts that financial markets should be transparent and fair. But is there a risk that regulation will strangle innovation in the funds business? Funds Europe, in association with Calastone, surveyed the industry to ask whether technology could provide a solution. 

Overview of the research:

  • 93% of respondents say the amount of effort required to comply with regulations in the funds industry has increased
  • The second version of the Markets in Financial Instruments Directive (MiFID II) has created the most work
  • 72% say a side-effect of regulatory compliance is underinvestment in other parts of the business
  • 79% say the cost of regulation will ultimately be borne by the end investor
  • 80% say legacy technology is a problem for the funds industry, especially in the back office
  • 19% say asset managers are good at adopting new technology (down from 21% in last year’s survey)
  • Out of a list of emerging technologies, blockchain is expected to have the biggest impact