Banking

It’s no secret that the last decade has been one of the most transformative periods for the global banking industry, at least from a regulatory perspective. Financial institutions have been forced to evolve under this new era of transparency, with authorities taking unprecedented steps to ensure that consumer protection

The US housing market is on a roll, having recovered from the bleak days of crisis 10 years ago. But mainly due to the new regulatory environment, large financial institutions have veered away from mortgages. Independent mortgage banks have filled the vacuum, however, and doubled their share of the market in 10 years. What exactly are these banks, how do they operate, and what is their contribution to the industry?

Thanks in no small part to recent rate cuts by the US Federal Reserve System, Singaporean banks are now under increasing pressure. And the outlook for the Asian city-state’s banking sector suggests that things may get only worse this year, especially for the three biggest players:

Banks have traditionally been considered the “owners” of whatever data they manage to collect on their customers. But that entrenched viewpoint was challenged by Open Banking, an initiative of the UK’s Competition and Markets Authority. Under this model, the consumer owns his or her data. Now the concept is spreading not only to other parts of the world but to non-payment financial products and services via Open Finance.

In today’s cybercrime-infested environment, the frontline position of chief information security officer couldn’t be more crucial. But increasingly, CISOs find that not only do they receive criticism for events beyond their control, the control they do have to determine their firms’ information-security strategies is being threatened. The CISO must be re-empowered by regaining sole ownership of the levers needed to set the company’s security priorities and drive its cyber-defense agenda.

Increasingly, core banking services no longer occur within the brick-and-mortar walls of a community’s bank. Financial services have broken out into mobile and online banking, with fintechs and neobanks competing with incumbent banks on their own turf. Banks should adapt to digital advances, but building customer trust is the make-it-or-break-it ingredient. Innovation will constantly change, but the need for relational trust between bank and customer will always remain the same.

The risks to banks and their executives from non-compliance with anti-money-laundering regulations are increasing dramatically. The United Nations estimates that as much as $2 trillion (5 percent) of global GDP is laundered. Since 2018, the exits of CEOs from Westpac, Swedbank and Danske Bank underscore the consequences. To effectively manage money-laundering risks, bank executives need to have sound answers from their compliance, security and IT professionals to five core questions.

The Great Recession forced big international banks to re-evaluate risks and “de-risk” some overseas operations, guided by an augmented focus on AML and CFT compliance. Unfortunately for Caribbean banks, de-risking for the North American majors translated into trimming ties with them. Changing the perception that they are “risky” has not been easy for Caribbean bankers, but through resolute, concerted effort, the risk profile of the Caribbean banking industry is improving.

As banking advances further into the Digital Age, some aspects will remain the same while others change. One factor that will not change is the need for banks to manage risk. Technology is both an opportunity and a challenge, aiding risk management to become more efficient but introducing new risks. One thing is certain, banking of the future will still be centred on the goal of providing top-notch customer service, which will be enhanced by data and technology.

Even the most conventional banks are introducing digital solutions—but few can claim to be completely digital. Poland’s mBank is not only a pioneer in digital banking but digital through and through, committed to offering the cutting-edge products and services that clients need and want via the mobile and online channels that are most convenient for them. In our interview, CEO Cezary Stypułkowski describes mBank’s intentions to innovate even more.