A PwC survey of 176 Banking & Capital Markets (BCM) CEOs across 62 countries reveals the huge challenges facing banks globally. BCM CEOs see over-regulation (87%), geopolitical uncertainty (81%) and exchange rate volatility (76%) as really affecting their banks. The combination of higher capital charges, liquidity demands and compliance costs is forcing many to abandon what had once been profitable mainstays in their business. The survey also shows that BCM CEOs see customer relationship management systems, data analytics and social media communications and engagement as the top three areas of technology that will yield the greatest returns in terms of engagement with wider stakeholders.
Indeed, technology is transforming customer expectations, lowering barriers to market entry and opening up growing competition from FinTech entrants. Almost every BCM CEO believes it is the trend most likely to transform customer, regulator and other key stakeholder expectations over the next five years.
This is the reason why, the FSB, which sets global standards implemented by G20 member countries, will issue policy recommendations in September after looking at leverage in funds, and their operational risks and securities lending activities. The head of the international group of policymakers and regulators, FSB Chairman Mark Carney, said in a letter to central bankers and finance ministers from the Group of 20 economies meeting in Shanghai that assessing the systemic implications of fintech innovations would form part of the task force’s core policy work this year.
It marks the first time that regulators at the global level have begun scrutinising fintech, a sector that includes blockchain, the distributed ledger technology underpinning bitcoin that proponents say could radically change payments systems.
Olivier Carré, partner and Banking Leader at PwC Luxembourg said: "New technology development from Robo advice, Blockchain to Artificial Intelligence should help banks foster a more informed, engaged relationship with customers but it will also cause radical changes to, and cost savings in, operational processes. Some banks are already acting fast on this while others seem barely to have started."
The FSB will continue looking at asset managers, the shadow-banking sector, clearing houses and insurers.
Read the full articles here:
- Financial Times : Financial Stability Board adds fintech to list of worries
- PwC: "The world needs banking but not banks" according to a new PwC report
- Fortune: Global Regulators Now Eyeing Fintech