• Industry: Banking
  • Type: Publication series
  • Date: 12/25/2012

Frontiers in Finance: Cost Optimization 

The global economic situation continues to dominate the environment for financial services. In the US, there are a few encouraging signs in the retail and housing sectors, but uncertainty leading up to the presidential election cast a long and lingering shadow. In China, there are fresh concerns about the slowdown in growth, despite continuing strong exports. Strung between these two rather shaky pillars, in Europe, the sovereign debt crisis still appears to be very slow moving towards a resolution; the political impetus for change looks likely to slow down as we approach German elections in 2013; and in the long term, the sustainability of the post-war social-democratic consensus looks ever more fragile.
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In this issue of Frontiers in Finance, we return to the themes of cost optimization, transforming business and operating models and the challenge of liquidity, among others.


Articles in this edition include:


  • The longest journey: Update on financial services regulation: Our Regulatory Centers of Excellence around the world discuss the impending regulatory issues financial services firms face as they seek the best strategies and business models to maximize value.
  • The opportunity for the finance function in insurance: Better data, efficient processes and lower costs: The global insurance industry is facing a surge of change in almost every aspect of its business.
  • China rising: The focus of payments moves east: Banking operations around the world have been under extreme pressure over the past few years, but few functions have evolved as quickly and drastically as the payments sector.
  • Derivatives reporting: Deadlines looming: The financial crisis focused intense scrutiny on complex derivatives especially those bespoke instruments traded off registered exchanges on the over-the-counter (OTC) market.
  • Technology and intelligent insurance: The financial crisis and its aftermath have created dramatic changes in the environment for insurers.
  • The rise of non-bank credit: Revolution or evolution? Traditional bank lending continues to be constrained by tighter regulation, increased capital requirements and a more conservative approach to risk. This would appear to open up significant business opportunities for alternative sources of credit, but there are a number of factors that may hinder the much-heralded revolution in credit provision.
  • Eurozone banks: “An ever closer union”: More than 3 years after it began, political momentum to solve the crisis has moved forward with the announcement of the intended banking union.
  • Stuck in the middle: Outsourcing the middle office: Outsourcing back-office functions – accounting, custody and administration – has been common practice in financial services for many years. But in the last decade, outsourcing has expanded to the middle office of investment management companies.
  • Striking the right balance: How the board acts as the fifth line of defense: Board directors have a significant share in the responsibility for overseeing implementation of the regulatory reforms that have been sweeping the global financial services industry. At the same time, they are to assist their organizations to lead businesses under challenging global conditions.
  • Dark pools: In the spotlight again: Dark pools will not be – and in practice could not be – regulated out of existence. But they present a real threat when the volumes traded through them become a significant proportion of total market activity.