Nearly half of financial institutions have reported that regulatory compliance has slowed digital transformation, according to digital banking security specialist, OneSpan’s, latest report.
The Global Financial Regulations Report, which surveyed more than 150 senior banking leaders, representing global financial institutions with assets up to $100bn, highlighted how financial institutions are responding to new challenges presented by hacking attacks, protecting sensitive data and stringent regulations.
According to the report, despite major security and regulatory challenges financial institutions were faced with in 2021, 84% of banking leaders are taking steps to prepare for initiatives such as Central Bank Digital Currency, over the coming year.
Half of banks are trying to implement mobile app shielding technologies to secure mobile apps in anticipation of upcoming CBDC initiatives.
The top compliance challenges for banks, the report showed, included reducing or preventing cyber-attacks, safeguarding sensitive data, keeping pace with changes in consumer privacy laws and industry regulations.
Almost half of the banks surveyed are putting digital remote identity verification and biometrics in place to comply with industry regulations, while a further 41% are prioritizing emerging technologies like remote online notarization (RON).
The research revealed that bank leaders are generally optimistic about crypto regulations as 67% of financial services leaders agree that they make banks’ participation in the market more attractive.
In the US, the Covid-19 pandemic accelerated digitalization including the adoption of artificial intelligence solutions, and digital banking, according to the report.
Steven Worth, interim president, and CEO at OneSpan, said: “Catalyzed by the pandemic, the new digital banking age has left regulators with a nearly impossible task: to create an extensive and safe regulatory framework without stifling innovation.
“However, our research found that half of global senior banking leaders have hit hurdles because of regulatory compliance. OneSpan’s Global Financial Regulations Report will arm banks and financial institutions with information they need to both be compliant and sustain their competitive position.”
Consumers have been at the forefront of the post-pandemic banking revolution though there are concerns traditional US banks are not structured for the digital shift, paving the way for fintechs to thrive.
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