Become more agile and be prepared for regulatory changes.
Regulatory compliance costs in financial services are at an all-time high. One bank alone paid $20 billion in 2013 to resolve compliance issues and avoid lawsuits, according to multiple news outlets. Factoring in fines and lawsuits, Morgan Stanley analysts say that compliance since 2009 has cost the top banks in the United States and Europe $230 billion.
In this unprecedented regulatory environment, banks must now comply with more than 1,000 regulations brought about by the global financial crisis of 2008. To keep up, financial services organizations are spending as much as 75 percent of their change budgets, and increasingly more of their operational budgets, on the increased cost of regulatory compliance.
The broad-reaching economic effects of the crisis have limited most banks to responding only to existing and impending requirements. However, economic change and technology advances are aligning to give banks an opportunity to step back and take a longer-term, more proactive approach that optimizes their efforts in governance, risk and compliance (GRC) and actually generates business value.
Together with strategic partners, CSC has developed an effective approach to understanding the regulatory landscape two to three years out and created a portfolio of initiatives that optimize the use of resources and funding, and identify or rationalize appropriate supporting capabilities.
CSC’S Regulatory Response
Despite insights gained from coping with and managing regulatory change, most banks still lack a holistic framework or methodology to respond to these regulatory issues. Instead, banks take a reactive approach to regulatory response. And, as regulators continue to increase their scrutiny of banks, monetary fines — imposed as a result of enforcement action — are growing exponentially.
Due to the complexity of their application landscapes, banks have difficulty in analyzing and transforming their organizations to meet regulatory requirements. Reducing the application surface area and optimizing portfolios is an overarching priority that is within CSC’s expertise in IT, outsourcing and consulting. Together with our partner, AxiomSL, we structure and prioritize the change portfolio to meet the new regulatory regime, delivering a portfolio view of regulatory changes with an optimized sequencing of initiatives.
CSC helps clients anticipate and respond to regulatory obligations while releasing valuable resources and budget so they can focus on their business growth activities.
CSC offers banks the opportunity to partner with leading providers to deliver innovative solutions. With the use of analytics, warehousing and reporting factories, regulatory requirements can be efficiently managed while banks improve automation, develop reporting transparency and increase consumer protection.