GRC special report: editor's letter

For the financial sector, as for philosophers, the ideal is to have rigidly defined areas of doubt and uncertainty. But the rules of finance are continually changing – the reaction to economic crisis and high-level wrongdoing has come in the form of multiple far-reaching laws with an uncertain effect. Guesswork still surrounds the final shape of the US Dodd-Frank Act, the Volcker Rule, the Basel III capital adequacy rules, the Foreign Account Tax Compliance Act, and so on.

Although this may be causing some sleepless nights for senior bankers, it is not altogether bad news for the governance, risk and compliance (GRC) industry. Senior managers and directors may bemoan the amount of time they now spend on risk and compliance issues – to the detriment of business management and strategy development – but software providers say this is at least creating a demand for software that can help them along.

And where the major banks are going, the minor ones are following. According to the Operational Risk & Regulation compliance software rankings survey, the industry is becoming increasingly interested in GRC products. From smaller banks to other financial companies, they are as much concerned about the reputational risk of a GRC failure as about the need to comply with new regulations, however they end up looking.

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