Navigating the Flood of Regulations
The banking industry has always been subject to a vast array of regulations and laws. However, since the collapse of Lehman Brothers and the subsequent financial crisis in 2008, banks have been confronted with even stricter regulatory red tape.
Advancements in digitalization have reinforced this growing trend: In light of the trend toward a fully digital market, new regulations are increasingly being rolled out. This, of course, has a tremendous effect on how a bank executes its business. Consequently, banks, regardless of size, must all stay abreast of future requirements to stay ahead of the game.
Bringing external partners on board
Smaller banks in particular tend to lack the necessary resources to monitor such regulatory issues and incorporate them into their own processes.
As such, they must rely more and more on the knowledge of external partners – which is far more cost-effective than establishing an in-house unit. As a result, demand for regulatory advisory services is on the rise.
Classifying the financial risks of investment products
«At Credit Suisse, we are highly versed in the specific challenges that new banking regulations pose. For this reason, we are using our experience in this area as an opportunity to assist other banks with our know-how,» explains Paolo Giuseppe Muzzarelli, Head of FI Transaction Banking Products at Credit Suisse.
For example, Credit Suisse has created «Product Risk Classification (PRC),» an innovative service for third-party banks that is optimized for use in the area of investment suitability, such as FinSA, MiFID and HKMA. PRC is a comprehensive and easy-to-understand indicator, which assesses the financial risk(s) associated with specific investment products and classifies them into one of five risk categories. It was primarily created for Credit Suisse’s own private banking business in accordance with national and international regulatory requirements.
Keeping an eye on regulations
To ensure that a bank's business conforms to the regulations and laws, Credit Suisse has developed the Regulatory Golden Source (RGS). This forward-looking tool is a result of the analysis performed by the Regulatory Impact Team at Credit Suisse, which continuously monitors the national and international regulatory landscape to identify requirements that have an impact on the various segments, products, and activities of a Swiss bank.
«RGS is of valuable assistance to project managers when translating complex regulatory details into a clear, practical concept,» says Mauro Bizzarri, Head of Regulatory Products at Credit Suisse. The exclusive tool now covers more than 120 national and international regulations.
Changing advisory process
Regulatory pressure also impacts the advisory process of banks. For instance, the introduction of the Federal Financial Services Act (FinSA) makes it challenging for asset managers to offer the right investment coverage. This is precisely where the Portfolio Advisory Service (PAS) of Credit Suisse comes in.
The bespoke service offering comprises the implementation and management of all activities surrounding the investment process, from defining the strategic asset allocation to managing model portfolios.
In Switzerland, Credit Suisse is among the few financial institutions to provide comprehensive solutions for handling regulations and laws. Together, the three innovative services of Product Risk Classification, Regulatory Golden Source, and Portfolio Advisory Service from the unique enhanced offering that assists banks in their private banking-related activities.
More information you will find here.
The information provided herein is not legally binding and it does not constitute an offer or invitation to enter into any type of financial transaction. The information and opinions contained in this document represent the views of CS as of the date hereof and are subject to change without notice.
CS provides no guarantee with regard to the content and completeness of the information and where legally possible does not accept any liability for losses that might arise from making use of the information.
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