Financial Markets Regulatory Outlook 2021

Recover, renew, rebuild

Our annual assessment from Deloitte’s EMEA Centre for Regulatory Strategy explores how major regulatory trends will affect the financial services industry across EMEA in the year ahead, and how leaders can anticipate and respond to them effectively.


The 2021 edition of Deloitte’s Regulatory Outlook identifies nine cross-sector themes of strategic significance, as well as a number of other supervisory priorities in each of the Banking and Capital Markets, Insurance and Investment Management sectors.

Click on the boxes below to access our predictions for each theme, or download the full report.


Cross-sector themes

Credit risk, financial resilience and business model viability

In light of COVID-19, 2021 will see firms trying to manage credit impairments, implement recovery measures, maintain financial resilience, and pivot their business models.

Final call for IBOR

IBOR transition has entered what should be, for the most part, its final year. There remains a risk of disorderly transition, and we are also likely to see a multitude of competing rates in the market in January 2022.

Brexit – beyond the transition period

We do not expect significant slow-down in activity as supervisors press banks to deliver the substance agreed in their authorisation plans. We also anticipate increased EU supervisory pressure for certain clearing activity to migrate to the EU.

Sustainability

Regulatory work on sustainability has continued throughout the pandemic, as regulators continue to progress climate-related stress test initiatives, while at the same time pressing firms to integrate ESG considerations fully into their risk management frameworks and business strategies.

Conduct, culture and governance

Supervisors expect firms to promote cultures that seek to achieve good customer outcomes, but at the same time, firms face continued pressure to manage their finances responsibly.

Deploying digitisation and innovation

Firms should be sensitive to the supervisory concerns raised by the speed of digitisation, including issues such as operational resilience, conduct and prudential risks in payments, and AI governance and risk management.

Financial crime in the new normal

Amid concerns that the mass shift to remote working has materially altered or facilitated patterns of financial crime, the near-term supervisory priority will be to ensure firms maintain robust risk and control frameworks in this ‘new normal’.

EU/UK regulatory divergence

There are a number of big ticket items where we know that the UK’s regulatory approach will diverge from the EU’s in the year ahead. Basel 3.1, CRD5 and Solvency II implementation are pertinent examples.

Operational resilience

Supervisory attention will focus on ensuring that firms have taken stock of lessons learned in the first wave of COVID-19, and are prepared for future waves and associated disruption.

Sector-specific supervisory priorities

Sector-specific supervisory priorities

In this section we outline a range of supervisory priorities across the insurance, investment and banking and capital markets sectors complementary to the content in the cross-sector themes

Key contacts

Laurent Berliner

Partner | EMEA FSI Risk Advisory Leader


Vincent Gouverneur

Partner | EMEA Investment Management Leader


Jean-Philippe Peters

Partner | Risk Advisory Leader


Nick Tabone

Partner | Strategy, Clients & Industries Leader


Simon Ramos

Partner | IM Advisory & Consulting Leader