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The recent vote by the United Kingdom (UK) to leave the European Union (EU) has put pressure on global markets. Companies that trade in both the EU and the UK can now expect a new wave of regulations to which they must comply. Brexit is likely to affect trading regulations, but will also have an impact on data related regulations such as privacy and consumer protection laws, writes Gary Allemann, MD of Master Data Management.
The reality is that many African corporates have already had to take steps to comply with European regulations such as the European consumer privacy laws, and European risk management legislation such as Solvency II. The implications of the Brexit are that the UK will need to bring in its own, similar legislation, creating new challenges and costs with regards to implementation.
A study by independent think-tank JWG suggests the uncertainty and regulatory changes required for the Brexit could cost at least £17 billion over the next decade. The UK financial sector, and others, will need to rework various legislation rather than relying on existing European Union’s treaties. In addition, South African Businesses that trade in the UK, will be impacted.
Furthermore, additional regulation is a bitter pill for struggling African corporates to swallow, due to many local companies already struggling to cost effectively meet existing compliance requirements.
Thanks to Brexit, the business case for an extensible data governance centre that allows us to quickly and easily understand the impact of compliance on data, reuse what we already have, and communicate compliance to the various regulators has increased.
In the short term, the uncertainty created by the Brexit makes existing risk management regulations, such as stress testing and BCBS 239, more important. Now, more than ever, South Africa needs to show that our financial sector is solid, and that we remain a relatively safe investment option.
South African businesses that invest in sustainable data governance will reap the benefits in reduced cost of compliance, and will also lay the foundation for the strategic use of information to drive decisions.