2015 Banking Regulatory Outlook

For banks and other financial institutions, 2015 promises to be another challenging year of implementing financial reforms required by regulators. A number of these challenges were highlighted in a January 7th article on the 2015 Banking Regulatory Outlook published in Bank Systems and Technology.
 

One of the contributors to this article, David Wright of KPMG, points out that rather than facing new regulatory requirements, financial institutions will focus on the continued build-out of IT and risk management infrastructure needed to meet the heightened expectations surrounding capital, liquidity, resolution plans and compliance. He highlights how reducing reliance on manual, error-prone processes can save costs, improve accuracy and ensure reliability over the long run.
 

Mr. Wright goes on to point out that the “common currency” to help financial institutions meet many of the new regulatory requirements is the availability and delivery of accurate data. For example, high-quality granular data is needed to deliver daily liquidity information and analytical reports that cover all of a firm's legal entities for both internal and regulatory purposes. He advises that data and analytics are essential ingredients to risk management and compliance and that firms need to shift their focus from just getting through the next 12 months to investing in infrastructure that can get them though the next five to ten years in a more sustainable, cost-effective, and reliable way.
 

Tagetik is hearing similar themes from our banking and financial services customers and has worked with a number of them to address new regulatory reporting requirements such as Call Reporting, FinRep and CoRep, as well as supporting the new stress testing requirements in the US and Europe. We have seen the most successful organizations are the ones who are investing with a long-term vision in mind – looking beyond the immediate pains and investing in a Financial Performance Platform that can automate and streamline the regulations of today, while setting the stage for new regulations as they come down tomorrow and beyond.
 

This is also an opportunity for Banks to leverage their required take advantage of the investment in needed for regulatory reporting and apply it to other business needs expand on it. For example, the modeling functionality needed for stress tests, such as DFAST in the US, can also be used for business modeling and analysis.
 

What are your thoughts? Are you investing in the infrastructure needed to address your the long-term needs in today’s regulatory environment? Have you aligned your business plans to your regulatory requirements for capital, etc. Is your current approach sustainable as your organization grows and evolves?

How Tagetik is helping financial institutions to address regulatory compliance challenges, check out some of the links below:
 

How Banks Can Reduce the Burden of Regulatory Reporting – Ventana Research

 

Case Study: Erste Group Bank

 

Tagetik CPM Software

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