Financial services regulatory pressure grows with ESG rules the main culprit
The industry is «facing regulatory scrutiny around greenwashing, new and more demanding disclosure requirements, and increasing expectations from supervisors», KPMG said.
The firm's third Financial Services Regulatory Barometer study, which measures the regulatory pressure faced by financial services firms in the UK and the EU, also found financial resilience was having a big impact.
KPMG found that pressure on firms remained «intense» with an aggregate score of 7.2 — up from 7.0 in February this year. Moreover, for the third time running, ESG and sustainable finance regulations were putting the most pressure on firms (8.5 out of 10).
The industry is «facing regulatory scrutiny around greenwashing, new and more demanding disclosure requirements, and increasing expectations from supervisors», it added.
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When looking at financial resilience, the study showed growing pressure on banks and insurers as they awaited final rules for Basel 4 and Solvency II, while «facing significant implementation challenges in the short to medium term».
KPMG head of risk and regulatory advisory Rob Smith said: «Continuing economic uncertainty, including inflation and recent exits from the market has shaken the financial services industry and led to much-needed debate about what regulators could do differently.
»The unwavering focus on ESG and sustainable finance continues, with regulatory pressure on firms persisting as supervisors and customers increase their expectations.
«Closing in rapidly on the top spot, we see new and expanded requirements for financial resilience, with continuing focus on appropriate levels of capital and liquidity, and even greater emphasis on
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