In 2007, monoline crisis started a rippling effect that still echoes today contributing to shape a framework for financial institutions worldwide.
This framework takes its roots in regulations learnt from those crisis e.g. Basel III with liquidity coverage ratio, regulations fed by sanctions and embargoes driven by country policies e.g. sanction against Iran. Data privacy regulations e.g. RGPD linked to the growth of big data are also molding the landscape. The globalized market also contributes to the design of this framework e.g. extraterritoriality of laws.
This framework significantly defines the financial market worldwide and the rules of the games.
Having this in mind, it is easy to understand how the “know your customer” (KYC) practices became cornerstone to the financial world business in the past years. Although I can see those perceiving regulations as walls, I also know those who see them as windmills.
Regulations are indeed a great opportunity to create business growth when seeing them as a dialog with clients. Dialog that helps improving customer understanding and knowledge across an entire company: The sacred voice of the customer is essential to improve its journey and be a key player on the market.
Saying this, implementing shared platforms in a bank comes with its challenges e.g. organizational silos, business and regional specificities, IT legacy, change management. Fin Tech can help e.g. Fenergo but they cannot make miracles, it is a join adventure to massively change the financial key players on their path to digitalization. It is a partnership as it was reminded in one of my recent meeting.
In Novinsight, our long and proven experience in that field shows that there are 4 levers to unlock the full potential of this transformation:
- Strong business leadership to impulse the necessary energy to change the organization beyond processes
- Strong regulatory and process expertise to manage program risks proactively and efficiently
- A partnership mindset to align all stakeholders internal and external to make the project a success
- A pragmatic approach with small victories carved into a long-term strategy
We have seen evidences of these levers in several successful international programs. Yet we believe this not the end of the story. We know that seeds that were planted have much more to offer to these institutions than the initial plan: It is a change of paradigm in the client relationship.