Republic's complex regulatory framework stunting growth, say companies
The
report by PwC
on trends in compliance, which surveyed 1,802 executives across 63 territories, including 32 respondents in the State, suggests that regulatory complexity is making effective compliance much more challenging here.
Some 97 per cent of Irish respondents said their organisation's compliance requirements have become more complex in the past three years, higher than global counterparts (85 per cent).
Regulatory complexity is the main reason making effective compliance more challenging and is much more pronounced in Ireland, where it is an issue for 78 per cent of companies, as opposed to 47 per cent globally.
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Resource capacity is also fuelling compliance effectiveness challenges more widely in the Republic, where 53 per cent of companies cited it as a problem as against 28 per cent of companies globally.
Nearly three-quarters of Irish respondents – in line with global numbers – said the increasing complexity was stunting key growth areas such as profitability, market expansion, new products and services,
artificial intelligence
(AI), and resource capacity.
On AI, while Irish firms are increasingly using technology to automate and optimise compliance activities, they lag global counterparts on AI adoption.
Just 12 per cent of Irish companies are either piloting or already using AI across a wide range of business areas – such as in predictive analytics, fraud detection and investigations – compared to more than double that for global counterparts (29 per cent).
The complexity of data across the organisation (63 per cent) and lack of technology tools (50 per cent) are the key challenges holding up the use of data to support compliance activities here, although these figures are largely in line with global companies.
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The report noted fewer than a quarter (23 per cent) of Irish companies are planning to invest more in technology to optimise compliance activities, behind global counterparts (34 per cent).
In addition, the report said fraud risks are the top priority for compliance functions in the Republic.
Some 44 per cent of Irish respondents cited anti-bribery or anti-corruption, anti-money laundering, and other fraud risks as the top priority for compliance, far in advance of global counterparts (25 per cent).
Another four in 10 Irish companies ranked consumer protection as the top priority, much higher than global counterparts (9 per cent). PwC said this disparity likely reflects the publication of the State's revised Consumer Protection Code.
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