Capco Blog

Regulatory reform: Are you prepared?

Despite continuing uncertainty over the ultimate form and scope of U.S. financial services regulations, leading financial services companies are moving ahead with preparations. Many key provisions will be implemented that will affect the way financial services firms trade and invest, what capital requirements they face, and whether they will need to exit certain businesses.

Board members and senior executives of financial services firms should consider the following questions related to strategy, customer and counterparty disruptions, structure, and data and technology as they assess their regulatory reform programs and prepare to comply with the legislative overhaul.

  1. Is your firm approaching the new regulatory environment as a challenge or an opportunity to take market share?
  2. Does your firm see its global growth rate hindered by its ability to enforce a program of full transparency and accountability? The burden has shifted toward demonstrating compliance rather than simply reporting compliance.
  3. Does your firm intend to implement a “one-touch” strategy to communicate and integrate changes to minimize customer dissatisfaction and attrition?
  4. Does your firm have a “high-touch” program to reengineer its supply chain with vendor partners based on permissions and prohibitions? As rules evolve and permitted and prohibited activities are identified, you may need to modify your customer and counterparty relationships.
  5. Does your firm intend to move its talent, hire new talent or partner with industry utilities as it moves operations into jurisdictions that permit domestically prohibited transactions? The shift of deal flow and volume to new markets could put severe pressure on labor resources.
  6. How does your firm plan to balance its shared services and utilities strategies with orderly liquidation requirements globally?
  7. Does your firm intend to convert its IT systems to meet transparency requirements based on uniform legal entity and product identifiers or map its systems to the new standards? These types of mandates present both threats and potential benefits.

Although many regulatory requirements are still to be determined, sweeping changes are inevitable and leading firms need to address this shift with a comprehensive, strategic plan.

What issues do you think financial services firms need to address to prepare for regulatory reform? Join the discussion.


Financial Services entities should consider the regulatory requirements as an opportunity to invest in their infrastructures and service offerings in an effort to be a leading competitor in the future. Unfortunately, until firms look at these requirements only from a strageic perspective (or as a band aide that needs to meet current regulations), they will continue to find it difficult to capture an increase in market share as well as enhance market position. The foregoing essentially means that buisness models, corporate strategies and governance needs to be evaluated and updated accordingly.

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