It is likely that in addition to the Basel framework and EMIR, further changes driven by MiFID are expected to enforce customer protection. The lack of regulatory harmonisation among European countries represents another significant test for banks, as revealed by the MiFID and the Dodd Frank Act upgrades. This is putting further stress on financial players with international objectives. Banks are therefore challenged with finding a cost effective solution to ensure they are fulfilling regulatory requirements whilst maintaining profitability.
New regulations for the payments industry have been introduced to enhance security and transparency to prevent fraud and encourage innovation. While SEPA is still influencing bank actions by introducing new legislation over the account migration of PSD2, it is possible to pinpoint areas likely to be regulated in the near future: bank account access, internet security and account transferability. The regulator’s objective is to increase market competition and improve bank transparency of services offered to customers.
Banks and insurance companies are reacting in the short term. They lack insight into the overall regulatory picture. Tough regulation is here to stay and compliance will be a steadfast success factor for financial players. Growth requires a multi-regulatory vision as it assists financial institutions with meeting reporting duties, keeping up with asset evolution and understanding additional controls. The availability of shared databases, advanced controls and data quality can address these multiple needs. After all, it is important to remember that regulations have been introduced to protect customers and promote innovation in the market.