OneSpan has published a new report that suggests that strict regulations are hindering digital transformation in the financial industry. The report noted that the standards are often much higher in finance than they are in other industries, which creates logistical challenges for large financial institutions that need to keep pace with technological innovation.
The findings in OneSpan’s second annual Global Financial Regulations Report are based on the feedback of more than 150 senior banking executives from institutions with as much as $100 billion in total assets. Those surveyed identified cyberattacks (53 percent), data protection (47 percent), and shifting consumer privacy laws (41 percent) as some of the biggest compliance challenges currently facing their companies. Meanwhile, nearly half (48 percent) suggested that digital transformation would be moving more quickly if they did not have to meet such stringent requirements.
However, the respondents were keen to embrace many emerging financial technologies. The vast majority (84 percent) are already taking steps to support centralized digital currency programs, several of which are expected to debut over the course of the next year. Banks are also keeping an eye on the cryptocurrency market, with 67 percent indicating that sufficient regulation would make them more willing to offer cryptocurrency services to their customers.
Until then, half of the respondents are planning to roll out mobile app shielding solutions to protect their mobile users, and roughly the same number are turning to biometrics and other forms of remote identity verification to comply with mobile banking regulations. Remote online notarization is similarly expected to become more popular in the immediate future.
“The new digital banking age has left regulators with a nearly impossible task: to create an extensive and safe regulatory framework without stifling innovation,” said OneSpan Interim President and CEO Steven Worth. “Our research found that half of global senior banking leaders have hit hurdles because of regulatory compliance.”
The Global Financial Regulations Report was put together in collaboration with Arizent. OneSpan itself provided biometric onboarding services for Belgium’s Belfius Bank in May.