Gozman, Daniel
(2014)
A post financial crisis study of compliance practices and systems in global financial organizations: an institutionalist perspective.
PhD thesis, London School of Economics and Political Science.
Abstract
The financial crisis of 2007–2009 and the resultant pressures exerted on policymakers to prevent future crises have precipitated coordinated regulatory responses globally. As a result, large scale regulatory change is being enacted within this industry to protect investors and economic systems. Very little research exists, either prior to the crisis or since, on how compliance practices are managed through technology within financial organizations. The research objective of this study is to understand how institutional changes to the regulatory landscape may affect corresponding locally institutionalized operational practices within financial organizations. The study adopts an Investment Management System (IMS) as its case and investigates different implementations of this system within eight financial organizations, focused on investment activities within capital markets. This study makes a contribution by outlining a detailed review of this technology and identifying post-crisis practices for organizing compliance and the social forces influencing them through technology. Through symbolic systems, relational systems, routines and artefacts the IMS diffuses new compliance practices and further embeds existing ones. The study shows that this system is not objective and is currently in flux as this dynamic and complex environment evolves in the wake of the global financial crisis. Correspondingly, social, political and functional pressures are acting to deinstitutionalise related behaviours and practices. Yet compliance behaviours and practices are simultaneously being institutionalised through coercive, normative and mimetic mechanisms. However, the study also highlights the ability of some agents to exercise limited control on the impact of regulatory institutions. The research found evidence that some older practices persisted and so the study suggests that the institutionalization of technology induced compliant behaviour is still uncertain. The research makes an additional contribution to practitioners by distilling the findings into a model of IS capabilities for compliance and a model to measure the maturity of a firm’s compliance capabilities.
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