APAC-BFSI-Outlook-2017

REGULATORY COMPLIANCE REMAINS A PRIORITY 1

2/3 MORE THAN

NEARLY 60% of global financial services companies improved infrastructure to support growing scrutiny

of global financial services companies are feeling significant impacts from regulatory reforms

Risk & Reporting measures drafted over the last few years require banks to focus on improving transparency, ensuring accountability and implementing warning systems. These requirements are largely internal but can indirectly a¥ect resources and operations. Regulators have recently been forcing multinational financial institutions to set up subsidiaries and separate riskier operations from basic banking activities. Such restructuring is a diŸcult task from an operational standpoint and is often associated with increased manpower and real estate costs.

Governance, Organization & Reforms are measures to strengthen regulatory oversight. They include consumer protection rules, enforcement of shadow banking controls, reforms to credit rating agencies and derivatives markets, etc. The multitude of reforms imposed upon banks significantly impacts their business models and baseline profitability. Trimming the fat in Asia Regulatory constraints have hit banks hard following the financial crisis, adding to the impact of uncertain market conditions. Fines and litigation due to regulatory lapses,

rising capital requirements, the steep increase in funding costs due to Basel III bu¥er norms, slower economic growth and lower-than-expected returns have all pushed major global banks in the Asia Pacific region to embark on a cost containment

¿ Thomson Reuters, State of Regulatory Reform 2016. Deloitte, Top regulatory trends for 2016 in Banking. KPMG, Evolving Banking Regulation, March 2015. CDW financial services, Tech trends for banks, 2015 & 2014. Unwork & DTZ, The future of the financial workplace, September 2014.Goldman Sachs, Who pays for bank regulation? June 2014. Cushman & Wakefield Research.

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