Financial Institutions: Keeping an eye on regulations and laws

Navigating the flood of regulations

Smaller financial institutions in particular could struggle to stay in step with the latest regulations and laws. External partners are on hand to provide the necessary know-how. 

Subject to regulations and laws

The banking industry has always been subject to a vast array of regulations and laws. But since the collapse of Lehman Brothers and the subsequent financial crisis in 2008, banks have been confronted with stricter regulatory issues.

Advancements in digitalization will only reinforce this trend: In order to create a fully digital common market, more and more new regulations are being rolled out. These always have an effect on how a bank does business. This is why banks of all sizes must stay abreast of future requirements to get ahead of the game.

Financial Institutions bring external partners on board

Smaller banks in particular frequently lack the resources needed to monitor regulatory issues and incorporate them into their own processes as necessary.

For this reason, they are increasingly relying on the knowledge of external partners. This is more cost-effective than establishing in-house resources. As a result, demand for regulatory services is on the rise.

How financial institutions can classify the financial risks of investment products

"At Credit Suisse, we are highly versed in the specific challenges that new banking regulations pose. For this reason, we are using our experience in this area as an opportunity to assist other banks with our know-how," explains Paolo Giuseppe Muzzarelli, Head of FI Transaction Banking Products at Credit Suisse.

For instance, Credit Suisse has created the Product Risk Classification, an innovative service for third-party banks that is used in the area of investment suitability (such as FinSA MiFID, HKMA). The Product Risk Classification is an easy-to-understand risk indicator that assesses the financial risk of specific investment products and classifies them into different risk categories. It was created especially for the private banking business in accordance with national and international regulatory requirements.

Keeping an eye on regulations

To ensure that a bank's business always conforms to the latest regulations and laws, Credit Suisse has also developed the Regulatory Golden Source. The Regulatory Impact Team regularly monitors the national and international regulatory landscape to identify requirements that have an impact on the different segments, products, and activities of a Swiss bank.

"The Regulatory Golden Source is of valuable assistance to project managers when translating complex regulatory details into a clear, practical concept," says Dr. Mauro Bizzarri, Head of Regulatory Products at Credit Suisse. The exclusive tool now covers more than 120 national and international regulations.

Changing advisory process for financial institutions

Regulatory pressure also impacts the advisory process of banks. For instance, the introduction of the Federal Financial Services Act (FinSA) makes it a challenge for asset managers to offer the right investment coverage. This is precisely where the Portfolio Advisory Service (PAS) of Credit Suisse comes in.

The bespoke service offering comprises the implementation and management of all activities surrounding the investment process, from defining the strategic asset allocation to managing model portfolios.

In Switzerland, Credit Suisse is among the few financial institutions to provide comprehensive solutions for handling regulations and laws. Together, the three innovative services of Product Risk Classification, Regulatory Golden Source, and Portfolio Advisory Service comprise the unique enhanced offering that assists banks in their private banking-related activities.