Abstract
Following serious economic recession, government and industry attention on governance, risk and compliance has increased, causing a shift in institutional logics away from free markets towards enhanced supervision and regulation. This shift has created new regulatory institutions designed to enhance trust in transactions conducted through financial intermediaries on behalf of investors. The study explores how a major IT vendor implements an Investment Management System at eight global financial organizations over a 3 year period. The findings offer some interesting insights into the outsourcing relationship in building trust through regulatory controls for developing robust compliance practices both externally and internally. Our research finds, however, that dynamics of trust between investors, regulators and financial intermediaries may be undermined by persistent practices derived from pre-crisis institutional behaviours and logics.
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Notes
- 1.
Including the Alternative Investment Fund Managers Directive (AIFMD), Capital Adequacy Directive IV (CAD IV), European Market Infrastructure Regulation (EMIR), Markets Abuse Directive II (MAD II), Markets in Financial Instruments Directive II (MiFID II), Undertakings for Collective Investment in Transferable Securities Directive IV & V (UCITS III, IV & V), Packaged Retail Investment Products Regulation (PRIPS) and Regulation on Short Selling and Credit Default Swaps.
- 2.
The FSA’s ‘Treating Customers Fairly’ initiative aims to enact these principles (FSA 2011).
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Currie, W., Gozman, D. (2014). The Post-Crisis Outsourcing Relationship: Building Institutional Trust, Technology and Regulatory Controls. In: Hirschheim, R., Heinzl, A., Dibbern, J. (eds) Information Systems Outsourcing. Progress in IS. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-43820-6_5
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