KPMG's Financial Services Risk and Regulatory Centers of Excellence video 

Participants

Simon Topping, Partner, Financial Services Regulatory Centre of Excellence, ASPAC region

Jim Low, Partner, Financial Services Regulatory Centre of Excellence, Americas

Giles Williams, Partner, Financial Services Regulatory Centre of Excellence, EMA region

Regulation

Simon: The simple way of looking at regulation, it's a framework of rules within which financial institutions operate.

Giles: What the crisis did has meant that the regulatory landscape has changed enormously. The whole issue of too big to fail, and the recognition that banks actually may collapse... has suddenly come absolutely forefront of mind.

Jim: Some regulation will be stricter in some geographical jurisdictions than others and it is moving at different paces so what companies need to re-think is their strategic initiatives

Simon: The objective, really, of institutions now is to understand the new world order

Regional challenges

Giles: In Europe… the European Union, which in one respect drives central policy through directives, which should all be implemented in consistent ways across the different jurisdictions, but actually we're beginning to see some divergence on a local level in terms of the way it's being implemented in different countries. The three big challenges that all financial institutions are facing are firstly around the business model. The second big issue is around the treatment of customers and getting the trust agenda back into financial services. And the third big item is around funding...

Simon: A lot of the banks in Asia Pacific feel quite hard done by, because they feel they've done nothing wrong and yet they're being hit with this tide of new regulation.

They already have strong capital and liquidity positions, they don't have business models that have been destroyed, they don't have customers that are unhappy. So what they're looking at now is how they can turn this to their advantage.

Jim: Regulation in the U.S prior to the crisis you had various regulatory agencies that worked, perhaps not in conjunction with one another, that were regulating different institutions based on their size. What the regulation that’s coming out of Dodd-Frank act is trying to bring that all together. The immediate challenge is for companies first to understand how the Dodd-Frank act will actually impact them.

KPMG Answers

Giles: Our firms’ clients are really facing a mountain with this regulation, and it's really around the uncertainty of what's going to happen.

Simon: Clients are saying, "Please come to us and explain what's going on”.

Giles: What we've decided to do is to set up Centres of Excellence in ASPAC based in Hong Kong, in London for EMA, and in New York for the Americas region.

Simon: The aim of these centres is to enable our firms to provide advice to our clients on regulatory expectations and regulatory developments in all the major markets in which they operate.

Jim: ...a company that has operations in various jurisdictions doesn’t want just a local answer, they want the global answer and they want someone that can bring that answer, the insight and deliver upon that.

Giles: I think the advantage that the Centre of Excellence are going to bring to our firms’ clients is ability to tap into KPMG's both analytical skills in terms of what does this legislation mean for them specifically, but also what are their peers doing.

Simon: I spent 30 years as a regulator so one of my objectives is to pass that experience on to my clients

Jim: It’s going to be a process by which companies need to take a real long look at what they need to do

Simon: ...we're trying to help our clients to cut through the complexity and work out what are the bits they need to focus on.

Giles: People who manage to have a very clear strategy are the ones who could be successful.