Regulatory Compliance in Banking and Capital Markets – All About Good Data Governance

18 Jun 2014
by Jimit Arora

$2,999.00

INTRODUCTION

Banks and financial institutions are inundated by regulations introduced in the aftermath of the financial crisis of 2008. Lack of regulation and supervision in financial services, lax attitude of banks for managing risk, and easy evaluation standards by rating agencies are cited as some of the reasons that contributed to the crisis. The devastating impact of the financial crisis on the global economy led to regulators enforcing stricter regulatory norms and ensuring increased transparency, accountability, and risk management. Through the introduction of these regulations, the authorities, primarily, want to prevent another systemic breakdown and financial collapse.

The regulatory compliance space, while complex and overbearing, has been a top priority for senior executives at banks and financial institutions for the last few years, and will continue to be so for the foreseeable future.

Through this report, Everest Group explores the different regulations that banks and financial institutions need to comply with, and the key business, technology, and sourcing implications these regulations have. The report also captures the key trends for regulatory compliance-related transactions in banking and capital markets and relevant investments made by service providers.

Scope of the analysis

  • Services: Application outsourcing and infrastructure services (includes development, maintenance, enhancement, testing of custom/packaged apps, datacenter, desktop, helpdesk, and network) for regulatory compliance and management
  • Industry
    • Banking (retail banking, commercial banking, credit cards, loans, and mortgages)
    • Capital markets (asset management, investment banking, custody and funds administration, and brokerage)
  • Geographies: North America and Europe

BFSI ITO Contracts

CONTENT

This report is structured across four key sections, each containing insights on different aspects of regulatory compliance and related technology for banking and financial services domain:

  • Overview of regulations in banking and capital markets:
    • Evolution of regulatory compliance and market size
    • Description of different regulations for banking and capital markets
    • Business, technology, and sourcing implications of these regulations
  • Key trends for regulatory compliance-related IT transactions in banking and capital markets
    • Transaction characteristics
  • Service provider investments
    • Details of regulatory compliance-related investments such as proprietary solutions, alliances, and acquisitions by service providers
    • Comparative assessment and coverage across service providers of these investments
  • Outlook for 2014-2015
    • Market insights on emerging trends for regulatory compliance
    • Implications of these trends for buyers and service providers

Benchmarking of Domain Investments

Some of the findings in this report are:

  • In 2013, IT outsourcing market size for regulatory compliance-related initiatives is estimated at US$XX-YY billion. This spending is expected to grow at AA to BB% in the future, driven by the announcement of new regulations, amendments to existing regulations, and approaching timelines
  • Key regulations driving IT spending for regulatory compliance are Dodd Frank Act, BASEL III, and MIFID II, followed by other regulations such as EMIR and SEPA
  • Besides these regulations, revised OCC1 guidelines were issued in 2013, which mandate higher scrutiny of third-party vendors
  • BFS ITO transactions with regulatory compliance in scope were highest in 2011 with both TCV and number of contracts witnessing a spike
  • Service providers have developed significant capabilities to meet the key IT needs arising due to regulatory compliance mandate such as increased reporting, data governance, client onboarding, and risk management
  • Service providers invested in proprietary solutions, formed alliances, and acquired strategic targets for this purpose; investments into proprietary solutions witnessed a spike in 2012
  • Large global players have developed capabilities for overall regulatory compliance-related transformation of buyers
 

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