NFU Policy Paper on Regulatory Requirements
The NFU study “Coping with Compliance” (2018) shows that regulatory requirements, documentation, information to consumers and Know your customers (KYC), stemming from EU legislation have increased in the Nordic financial sector during the past two years. NFU is now publishing a Policy Paper of Regulatory Requirements with recommendations on the way forward.
In the recommendation, NFU calls out for a better balance for finance employees. This is not the situation today, where increased regulatory requirements have impacted the employees in the Nordic financial sectors in terms of increasing workload and stress levels. It is evident that finance employees are pressured from two directions; regulation and management. As the regulatory requirements and time spent on compliance tasks have increased, no adjustment has been made regarding the demands management put on employees’ performance in other fields, such as number of meetings and sales targets.
Potential negative implications due to the requirements are increased risk of conflict of interest between providing good customer service and following rules and regulation. Finally, the result of the study also questions if the regulation lives up to its intention; to improve customer understanding of financial products, increase the quality of financial advice and support the over-all financial stability.
Therefore, NFU recommends that:
– Employees must be recognized as an essential stakeholder of the financial sector, both by legislators, policy makers and the industry
– Employees must be given sufficient time, resources and training to carry out their duties towards the customer in a sound and professional manner
– Financial regulation must consider the employee perspective and strive to minimize the administrative burden it puts on employees, to the benefit of customers
– To ensure that the employee perspective is given the weight it deserves, trade unions should be an involved stakeholder throughout the whole legislative process, including the transposition and implementation of both hard and soft law
– The employee perspective must be taken in to consideration when reviewing current and developing new legislation, also in the EU Commission’s impact assessments. The cumulative effect of legislation also needs to be assessed, taking the employee perspective in consideration
– Regulatory requirements must be transparent and understandable for the sector, employees and consumers alike. Legislation should avoid excessive complexity and create a transparent and stable framework that supports quality financial advice and services, sustainable growth, rule compliance, as well as sound and effective supervision
– Management and business strategies, such as performance measurement systems and other targets, must be realistic, balanced and adjusted to new regulatory requirements that employees need to comply with
– Cooperation and dialogue with trade unions and their representatives at sector and company level is essential to ensure that the employee perspective is considered in management strategies
Read the full Policy Paper here.