An online survey of 120 capital market firms has found that investment in regulatory technology (regtech) is likely to rise further over the next 12 months.

Sometime during this quarter, Aite Group (the global research and advisory firm that specialises partly in regulation) and Cordium (the compliance consultancy) ascertained through their global survey that 45% of firms have invested more than before in "dedicated vendor technology for compliance," with a particular focus on systems that use the Cloud. 53% have invested in central platforms for compliance document-tracking and a further 13% are thinking of introducing such a platform in the next 12 months. Only 4% believe that they are taking an "entirely strategic approach" to regulatory reform and only 2% have fully automated compliance support, leaving everyone else open to the risks that go with manual processes. The research firms believe that this makes errors, gaps in compliance, a lack of agility in reporting during an audit and ultimately the risk of non-compliance likely.

The resulting report is entitled "Regtech Realities: Moving from Reactive to Proactive Compliance" and assesses the strategic direction and practicalities of compliance, including workflow, the problems of allocating resources and the ways in which firms decide how to invest in automation.

The firms' propaganda says: "Despite risks created by manual processes, trends regarding process management and monitoring are particularly telling. Only 8% of respondents use formal metrics to measure the impact of noncompliance and 43% don’t currently measure it at all. The majority [of respondents hailed] from the buy-side (70% work for asset managers or hedge funds), [with] their views on areas of importance for compliance IT investment and interest in next-gen technology. Given the size and structure of the research sample, the data provides a directional indication of conditions in the market.