Amid a complex regulatory landscape, what are the five most prominent themes for investment banks in 2013? That’s the topic of discussion in this week’s blog post.
Themes for 2013—and beyond?
Amid the alphabet soup of regulatory requirements that investment banks must deal with, Accenture sees five key trends that will shape the industry for 2013, and beyond.
- Changing the business model to be sustainable in an evolving regulatory environment. Forward-looking banks are looking to the long term to determine the impact that regulatory change will have on their business model—and redefining themselves accordingly. Some examples include consolidation, outsourcing capital-consuming business processes and increasing specialisation.
- Using capital to prioritise business decisions. Accenture expects that investment banks will shift toward making business decisions based on the marginal cost of capital required to execute, rather than previous methods based on perceived transaction profitability. In this respect, getting accurate information on capital will be extremely important.
- Redefining legal structures. Based on capital, banks may decide whether to continue trading high-risk, high-capital products (like rates, credit products and proprietary trading) in favour of lower-capital businesses. It is likely that banks that wish to continue proprietary trading may have to create a separate legal entity, or separate retail from investment banking operations.
- Revising e-commerce strategies. MiFID II and Dodd-Frank are forcing banks to examine their internal pricing, booking and confirmation models—and specifically, their robustness and suitability to operate and compete on an electronic exchange.
- Rebuilding reputations. Today’s nervous marketplace means that reputation can be a competitive differentiator. Banks must establish a strong market presence and protect their credit ratings.
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