Compliance for Tomorrow’s Bank

There’s a different kind of global warming taking place, and it’s in the regulatory environment. We’re seeing authorities in jurisdictions around the world step up regulatory scrutiny and consumer protection. Some countries, like the United Kingdom, are even overhauling their regulatory structure – the FSA will be dismantled and responsibility for prudential supervision returned to the Bank of England, which will be supported by a new independent authority in charge of consumer protection.

Thanks to globalization, developments in one part of the world are quickly making their impact felt in other regions. Unfortunately, many fear that this “regulatory warming” will stifle the progress of both innovation and technology. And of course, it will also change the way banks manage regulatory risk and technology infrastructure.

For instance, executive management will need to be kept fully informed on regulatory changes; and in turn they will have to clearly and regularly articulate their organizations’ appetite for risk. Banks will need to shore up risk controls, continually refine risk metrics, and automate as far as possible. Compliance will have to become “real time” and constantly vigilant, enabling banks to respond quickly to any infractions.

And this is where technology, such as core systems, can make a difference by providing flexible, parameter-driven regulatory solutions. Therefore, tomorrow’s banks must look at partnering with the right technology provider, who can take them to “real time” compliance, through robust core processing infrastructure and enterprise-wide risk management solutions. Most of all, they must keep their innovation efforts alive within the scope allowed to them by increasing regulation.