The report entitled Financial Services: Promoting a Global Champion is the latest in an authoritative series on the UK as a place to do business.
It spells out the impact of swamping the sector with new regulation in a short space of time saying: “Management time is diverted away from developing the business and serving customers and investment decisions are often put on hold during periods of uncertainty.”
The report also claims that IT investment is spent on compliance rather than improving productivity or customer service. CBI retail banking members say a third of all staff training was about new regulation.
CBI deputy director-general John Cridland said: “A robust regulatory environment is essential. Internationally it’s regarded as one of the strengths of UK financial services. But companies are being battered by the impact of relentless new regulation.”
The FSA responded to the report saying: “We welcome the CBI’s recognition that the UK regulatory environment performs well and that the FSA, as an integrated regulator, is beneficial to the UK’s pre-eminence among international financial centers.”
John Gibson, general manager, risk and compliance, at the Skipton Building Society, said: “There is no doubt that regulation has had a huge impact on internal operations at Skipton, with much resource dedicated this year to preparing for ‘Mortgage Day’.
“While the actual spend has been substantial, perhaps the greatest cost to us has been the opportunity cost of directing resource away from improving our service offering to customers.”
