Last week, I explained why banks should adopt an organized response to the current raft of regulatory requirements. This week, I’ll discuss six Accenture recommendations to enable such a response.
Adopt an expansive view of the global regulatory landscape, with the objective of long-term strategic planning. This approach can enable banks to manage change, support regulatory compliance and drive a long-term agenda.
Establish a champion for the regulatory agenda, preferably a C-level role that can influence decision-making and culture across the firm (including at the board level). Banks should support this champion with a regulatory function that is valued as a business partner.
Focus on the spirit of the law and develop solutions for the fundamental problems that the regulatory bodies are trying to address, such as comprehensive knowledge of your customers, your employees and your trades. In addition, banks should build specific solutions on top of the fundamental capabilities to drive reuse across regulatory jurisdictions and provide capabilities that can be leveraged for business advantage.
Design an efficient operating model for compliance, audit, risk and finance functions to maintain separation of duties while driving cost savings across the enterprise. Embedding cross-functional analytics into these capabilities, such as issue management, improves decision making.
Develop automated, comprehensive stress tests and integrate them into strategic and operational decision making. Banks should consider all types of risk, including secondary effects and liquidity risk. This satisfies regulatory requirements such as CCAR and enhances decision making for competitive advantage.
Invest in resilient, flexible technology platforms that can enable automation and industrialization of regulatory processes. This can enable a bank to capture, store and report detailed exposure information and make use of complex analytics.
- Read Part 1: The need for a coordinated regulatory approach.
- Download Serving Many Masters: Dealing with Multiple Regulators in Multiple Jurisdictions (pdf; opens in a new window).