Every week – or at least that’s how it feels to some of the banking leaders I have spoken to – a letter arrives from a government agency with another reporting and compliance requirement to implement.
The changes to the world of banking have stripped away much of the “cover” banks have traditionally enjoyed – both in terms of how their assets are managed and how they report that management.or at least that’s how it feels to some of the banking leaders I have spoken to – a letter arrives from a government agency with another reporting and compliance requirement to implement.
Industries like the pharmaceutical industry and the food industry – where an impure product can kill – have been heavily regulated for years. Governments, increasingly, are now treating banking as an industry where “impure product” has to be cut out early.
It’s an adjustment, and one that has to be made – but also one which provides opportunities. Regulated industries still have successful companies, and profitable companies – they just succeed with narrower margins for error and eyes open for changes – voluntary and involuntary.
As they confront this new, regulated world, I have seen banks take two broad stances on how defining success:
- For some, success is about avoiding fines for non-compliance, or for late submission of reports. They want to stop losing customers to other banks who can provide better service, or a more flexible mix of services. This attitude finds specific points of failure and works to fix them.
- For others, meeting the new rules, and offering the current best in class in customer service, are just business as usual. Their standard for success is far higher – it involves not just cutting cost and complexity, but developing a more intimate understanding of customers, and being able to be the bank each customer needs, by innovating in service and product.
Looking at these two approaches, I am reminded that races are rarely won by doing enough to avoid coming last. Not losing is not the same as winning – and, ultimately, is an approach that guarantees a place behind the real winners.
Meeting the challenges head-on, and looking at the need to transform operations as an opportunity to do so much more than comply, provides a totally different perspective. Instead of fixing each problem, banks can look or synergies – ways to simplify reporting and cut costs while also increasing their ability to offer customers an inch-perfect banking experience.
The new rules of banking do not just require boxes to be ticked. They demand ambition and insight, to see the possible rewards, and transparency and agility, to reach them. However, the rewards more than justify the effort.