A study conducted by KNEIP, the independent technology-based expert and service leader in data and reporting for the financial industry, reveals that European financial services businesses are increasingly using external consultants (46%) and technology (43%) to cope with the tight timelines to implement many of the forthcoming regulatory and reporting requirements. The research surveyed executive and compliance people in asset management, banking and insurance firms that participated in a recent series of cross-industry PRIIPs workgroups led by KNEIP.

Mario Mantrisi, senior adviser to the CEO at KNEIP, comments: “Financial services companies have atendency to kick their heels whilst waiting for a piece of regulation to be signed off. This leads to firms being under enormous time pressure to produce the necessary collateral to comply with regulations, such as PRIIPs, in order to meet the implementation deadlines.

“Our survey shows that only 15% of the respondent firms are looking to hire staff in order to comply with the PRIIPs legislation. Due to cost and time pressures, companies have increasingly moved away from hiring permanent staff to implement new regulations. External consultants and technology are seen as a more cost-effective solutions.”

The final regulatory technical standards of the PRIIPs legislation is due to be signed off in September and the implementation deadline is being maintained at 31^st December 2016 despite strong lobbying. This means that funds will only have a few short months to produce the mandatory documents and comply with the new requirements. An overwhelming majority (85%) of the respondents highlighted that the short time they have to produce the PRIIPs key information documents (“KIDs”) is a primary concern for their companies.

The content of the PRIIPs KIDs has made some firms anxious. Almost half (43%) of the respondents of the survey are hesitant about the content of the PRIIPs KIDs and believe these could be misleading to retail investors.

Mario Mantrisi at KNEIP concludes: “PRIIPsand its reporting requirements have caught many financial services companies off-guard. Many (43%) of the respondents to our survey were nervous about forecasting the future performance of their investment products.

“However, increased transparency and more accurate crystal-balling of investment products will help retail investors and improve the reputation of the financial services industry as a whole.”

The 60 financial services firms surveyed recently participated in a series of cross-industry PRIIPs workgroups, which were held in London, Luxembourg, Frankfurt and Paris.