|As the financial markets continue to evolve, financial institutions are working to grow and maintain profits while adjusting to ever-changing regulations and the downturn’s effects on profitability and performance. Successful institutions will need to reassess their operating models and address the effects of regulatory reform, competitive dynamics, evolving markets and increased expectations from stakeholders. The main challenges banking institutions face nowadays can be categorised as follows:|
Although not spared by the European crisis, the Luxembourg financial centre still remains a major player in the international environment.
Banks in Luxembourg have to face significant strategic challenges. Private banking industry professionals need to reinvent themselves in order to reinforce Luxembourg as a leading pole in private banking services. Retail bankers also have to face a growing competition from abroad as well as from non-traditional institutions. Asset management and investor services institutions need to prepare themselves for significant changes in infrastructures, regulatory frameworks and their competitive landscape.
Institutions will have to improve their understanding of their clients and re-examine the value and promotion of their products to ensure they remain competitive in this new environment.
The constant evolution of local and international regulations is a major driving force in the banking and securities industry.
The likely introduction of Basel III standards, as an example, will have a major impact on the way institutions run their business. There is likely to be an increased focus on capital efficiency. The introduction of new oversight rules and bodies may also have far reaching implications for the industry.
Implementing all these rules can be an issue, yet the real challenge is more about optimising your regulatory investments than merely complying.
To appropriately address strategic and regulatory challenges, impeccable execution is a must. Constantly improving operational efficiency has to be high on the agenda of bankers. Now more than ever, institutions have to optimise their processes, control their cost structure, and explore new operating models using all the tools now at their disposal.
Analysing the opportunity to mutualise operations or IT systems across entities or geographies, outsourcing non core activities, improving risk management frameworks and tools… these are some of the areas where financial institutions can find the levers to reach excellence.
Deloitte’s unique combination of technical expertise and practical implementation experience will help your institution navigate this difficult environment and address key industry challenges.