FSIReview: Issue 10
Winning the global regulation game
Although the immediate ordeal of the financial crisis may be over, new and even more disruptive challenges are looming. Over the next few years, financial institutions are likely to experience a period of profound change in their external environment. The response to the crisis has been focused on increased regulations, changes to corporate structures and business models and the need to find new ways of improving profitability.
In this issue, we highlight a number of recent developments in the area of managing regulatory and risk compliance. As new rules are introduced and existing ones tightened, financial institutions are faced with a host of challenges in keeping abreast of these changes, and putting in place an effective and dynamic compliance framework which is responsive to the market and regulatory development.
We begin with the results of Deloitte’s Staying Ahead of the Pack survey, revealing that contrary to the often-heard complaints from bankers on the increased cost from more compliance burdens, global financial services executives believe regulations have enabled business growth and they are expecting more to come.
We are also pleased to present the ninth edition of the Global Risk Management Survey, the latest instalment in Deloitte’s ongoing assessment of the state of risk management in the global financial services industry. Financial institutions must not only comply with new regulatory requirements and priorities, they also need the flexibility to respond to the next round of regulatory developments that are likely to come over the coming years.
Next, we explore the impact of the Common Reporting Standard (CRS). Due to apply in 2016, the CRS will impose reporting obligations and exchange of information standards that will radically change the world of international tax planning.
Risk transformation can enable a financial institution to elevate risk management from a functional capability to an enterprise responsibility that pervades the entire organisation. At the cornerstone of risk transformation is the role of governance and culture, which can be relatively straightforward to define in risk policies, codes of conduct, and ethical guidelines, but extremely challenging to implement and maintain. We present the business case for transforming governance and culture: achieving business goals while avoiding problems.
We round things off with our Asia Pacific Economic Outlook for the second quarter, which provides a near-term outlook for Australia, the Philippines, Taiwan and Thailand.