Damage to name is firms biggest concern

LOSING a company’s good name is a bigger threat than losing money for Irish financial services managers, according to a new survey.

Financial services firm Pricewaterhouse Coopers (PwC) said reputational damage was a much greater concern for managers than bad lending decisions or inefficient business processes.

But the survey also warned financial regulator IFRSA that the Irish regulatory environment was seen as too complex and was the biggest single barrier to companies achieving the highest levels of compliance.

Alan Merriman, PwC partner in charge of regulatory advisory services, said the survey emphasised the importance of a company’s reputation.

“The potential fallout of reputational damage can impact significantly on both a domestic or an international brand of any financial service provider,” he said. Mr Merriman said companies that took a “box-ticking approach” to compliance ran a greater risk of hurting their reputations than those who understood the value of compliance policies.

The survey showed most Irish managers were favourably disposed towards to complying with financial regulations. 80% of respondents said their compliance procedures were effective in protecting their business’s reputation.

He said this would position Ireland as one of the highest-ranking countries in the world in terms of standards for compliance and corporate governance.

But financial services companies and IFSRA needed to invest in more people and better compliance training. IFSRA would need to cooperate with the financial sector to keep Ireland at the leading edge of good business practice.

“It is vital that we all continue to invest in and support the creation of a world-class business-enabling regulatory and compliance environment in Ireland,” said Mr Merriman.

He added that the proposed consultation panel on the financial services industry would provide a forum for the regulator and Irish businesses to work together to develop an effective and efficient regulatory regime.