It is clear that, in a post-crisis world, strong and comprehensive financial regulation has become pervasive. The road to a safe and sound financial future that is transparent is paved with acts, rules, guidelines, and frameworks. While it is necessary to have such regulation in place, it is often viewed with great apprehension and dread by many financial institutions. This is often due to the fact that regulation leads to a regulatory burden. Specifically, we are talking about the resource costs to meet regulatory requirements (i.e. financial, human, and time).

Meeting these requirements can be particularly challenging for smaller institutions that have been trying to grow in a post-crisis world. To challenge well-established institutions by simultaneously growing operations and meeting increasing compliance needs is a difficult task, to say the least.

To address this issue, some experts are of the opinion that it is time to consider compliance as a shared service within markets. What this means is that institutions should be able to utilize a shared service that collectively provides a platform for smaller institutions to meet their respective requirements. Overall, the goal would be to improve efficiency through economies of scale.

Overall, the major point to get across is that compliance is something that is here to stay. Whether such a shared service centre for institutions will ever come to fruition in Canada is not the primary issue in this post. The focus is rather on institutions, big or small, finding cost-effective ways to meet their regulatory requirements. A shared compliance service is just one of many innovative ways to do so.