The BSA concedes that reform was necessary after the financial crisis and that financial services should be a highly regulated sector but it said it is concerned that no single authority has considered the aggregate impact.
A BSA survey found that two thirds of building society chief executives felt that the current regulatory environment puts their society at a competitive disadvantage. They also estimate that approximately a quarter of the current burden goes beyond what they would expect to face in running their business.
Robin Fieth, chief executive of the BSA, said: “Reform was clearly necessary after the financial crisis. However continued unchecked regulatory growth could well reach a tipping point which would disadvantage consumers as much as providers.
“It is telling that the prevention of innovation and diversification into new markets and channels comes top of the impact list for building society chief executives, only then followed by business volumes and profitability.
“Other than the sheer volume of regulation, it is the tendency for the one size fits all approach which is most damaging. No one has responsibility for assessing the cumulative impact of the regulatory burden. With new rules coming thick and fast from the UK and the EU there is a pressing need for this.
“It’s obvious that Boards must regularly discuss and act on regulatory and compliance matters. What cannot happen is that this topic forces important issues like strategy, development, governance and customer service to the periphery.”
