The insurance sector sees cyber security as the main challenge in the next year, according to a review of financial services compliance concerns by technology provider TAS.
Companies face increased regulatory pressures, while boards have stepped up their involvement and are helping lift the internal focus on compliance issues across their companies.
“Certainly, we hear there is a significant shift driving cultural change within organisations around compliance,” TAS CEO Shane Baker told insuranceNEWS.com.au.
TAS last week released its second Compliance Index report, and it hosted a roundtable discussion of the issues in Melbourne on Thursday.
Mr Baker says digital disruption and pressure to develop and roll out new products on new platforms increases the importance of embedding a strong risk and compliance culture.
“Digital disruption is here and it is real, and it is going to have a significant affect… on the insurance sector, as it has had on the banking sector,” he said.
The TAS research finds limitations in resources and experience are the main constraints to compliance management for the insurance sector, with respondents saying companies are aware of requirements but do not necessarily have good mitigation plans.
Focus is also increasing on internal education, with financial services groups aiming to better customise training according to existing knowledge and individual roles.
Insurance companies are also turning to increased automation to reduce the burden of compliance.
Across the financial services sector, 46% of index respondents indicated cyber security is their company’s leading compliance concern.
More than one-third of leaders are investing in Big Data and analytics to help safeguard sensitive information and gain improved risk insights.
“Both in Australia and overseas, we have seen a dramatic rise in cyber-security attacks, so companies are heavily focused on building cyber resilience and enhancing risk awareness to mitigate financial and reputational risk,” Mr Baker said.