Today, GFT, one of the world’s leading IT solutions and consultancy providers to the banking sector, releases the findings from a global research project aimed at uncovering the attitude of the global investment banking community to ‘The New Normal’ - a constant state of regulatory change.
The research surveyed 66 organisations across capital markets, including global and domestic investment banks and CCPs (Central Counterparties) from the UK, mainland Europe, North America and Asia. An overwhelming majority of respondents agreed that their organisation now operates in ‘The New Normal’. Yet despite a deep understanding of the impact of regulatory change, most organisations fail to capitalise on regulation to drive strategic investment and business change - relying instead on tactical work-arounds.
Key findings from the research:
Gareth Richardson, UK MD at GFT commented: “Banks realise that being aware of and prepared for regulatory change is the only way to effectively manage it. But, based on GFT’s extensive experience advising the top global investment banks, we know that to gain a competitive advantage in ‘The New Normal’ environment, banks must go beyond compliance and approach regulation strategically rather than tactically. In order to succeed in ‘The New Normal’, banks need to fundamentally change their operating models, and be flexible to the deluge of new regulatory change being imposed on them.”
Joan Carles Fonoll, USA MD at GFT, commented: “This piece of global research has demonstrated how the various jurisdictions approach regulation differently. In the US, for example, regulations tend to be more prescriptive, whereas in Europe they are usually subject to interpretation by the organisation in question. This is evidenced in the research, whereby US banks tend to view regulation more from a compliance perspective, rather than as a driver of consolidation and innovation.”
Chris Ortiz, UK MD at GFT, commented: “It is also clear that visibility and duplication of regulations internationally pose another significant challenge for global banks, as business climates differ worldwide.Basel III rules are set internationally, but it is up to the individual country's regulator to enforce them according to their own local policies.”
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