Frontiers in finance
The business environment for financial services remains challenging. The global financial system remains fragile and the outlook is still very uncertain. Economic recovery is questionable. Sovereign debt – especially in the eurozone – is a growing source of concern. New regulatory measures are still unclear. Political leaders are clearly struggling to manage a return to stable and sustainable growth.
Financial services firms need to think hard and develop new strategies and business models for the changing environment. But in doing so, it is important that banks, insurers and asset managers stay focused on their clients as they work through and around the changes in the system. This is a theme which underpins most of the articles in this edition of the magazine.
One way of understanding the imperative is to recognize regulatory developments are much more than compliance. All these external changes have direct impacts on relationships with customers. All carry threats, but equally all offer opportunities when properly analyzed. As we demonstrate, compliance reporting can bring significant benefits in understanding and managing the business. The increasing focus on consumer protection is really a stimulus to doing business better and making real improvements to the customer experience.
Apparently, technical issues such as the Foreign Account Tax Compliance Act (FATCA), or measures to migrate derivatives transactions to regulated exchanges will bring new dynamics to the client and customer experience which will open up opportunities for competitive advantage if implemented effectively. In a different way, technological changes – the obvious example in this issue relates to payments systems – have a direct impact on the customer experience despite initially seeming to be confined to the back office.
Although policymakers and regulators may appear to have different priorities from those involved in managing financial services firms, in the end everybody has a common interest in a stable, properly functioning industry. Many apparently burdensome or challenging external changes are, in reality, spurs to satisfying client and customer needs more effectively.
Thank you for your feedback on the relaunched frontiers in February of this year. We hope the articles in this issue are equally stimulating.