As geopolitical tensions and economic turmoil increase regulatory pressure on UK businesses, Starling Bank has intensified efforts to recover debts and enhance compliance measures. According to recent research from Dun & Bradstreet which surveyed compliance officers, AML and sanctions-related compliance efforts have dramatically surged 56% and 57% respectively (reaching 70% and 68% for Financial Services organisations) reflecting broader trends in regulatory demands.
At a period where business insolvencies have reached a 30-year high, over half (53%) of UK businesses have been forced to reject potential customers due to a lack of risk visibility, according to Dun & Bradstreet. Inflationary pressure coupled with high-borrowing rates has resulted in businesses needing a higher level of compliance and risk checking.
Head of Financial Services, UK&I Sara de la Torre, comments on the implications of increased compliance measures on the UK’s SMEs as well as on the banks themselves:
“With geopolitical tensions and economic challenges increasing, UK financial services organisations, including FinTechs, are facing heightened regulatory scrutiny. According to our recent survey with compliance officers, there has been a 66% increase in compliance demands amongst financial services firms. The surge in data governance and financial regulations efforts reflects the need for more rigorous risk management, as well as smart data practices.
“This landscape requires businesses to balance stringent compliance with cost-effectiveness, often without additional budget. The pressure on financial institutions to enforce robust anti-financial crime controls is growing, impacting their operations and relationships with customers.
“Effective adoption of proactive, data-driven insights becomes crucial here. Leveraging data allows organisations to streamline compliance processes and enhance risk mitigation strategies, optimising resource allocation amidst increased regulatory pressures. However, stringent compliance requirements also significantly impact SME growth by increasing operational costs and complexity. Many SMEs struggle to meet these demands without additional budget, leading to slowed growth and missed business opportunities. The need for enhanced compliance also forces businesses to invest more resources in risk management, potentially diverting funds from other growth initiatives. This creates a challenging landscape for SMEs striving to balance regulatory adherence with expansion and innovation.”
