Dealing With Divergence - A Strategic Response To Growing Complexity In Global Banking.

The shifting feelings toward global financial regulation convergence could lead to higher compliance costs for banks and reduce their ability to predict regulatory impacts on performance and profitability.

Several countries are indicating a greater desire to deviate from international banking standards, notably the Basel framework. Meanwhile, stirrings of populism and protectionism are fueling uncertainty in both developed and emerging markets. These developments are creating new concerns for the nearly decade-long global drive toward financial regulation convergence, at a time when many banks are struggling for profitability and regulatory compliance costs remain high.

How can internationally active banks cope with these trying conditions? A divergence-resilient approach to managing regulatory complexity can help bank officers and directors deal with the impact of growing and shifting regulatory demands on bank strategy, operations, and technology.

Such an approach can include targeted investments, such as in robotics and automation solutions, that can aid in dealing with the emerging, uneven environment. By taking a divergence-resilient approach, banks can improve commercial decision-making and create more sustainable business models.

See also: https://www2.deloitte.com/us/en/pages/regulatory/articles/dealing-regulatory-divergence-basel-iv-regulation-change.html