Against this backdrop, a "consolidation" operating model is starting to emerge. Investment banks are looking for ways to simplify their structures by streamlining their business activities and ultimately "thinning out" their legal entity structures to support consolidation and net capital benefits.
While doing this, banks need to think long-term, and organise a holistic response. They should also aim for market-driven specialisation. Financial services institutions can address competitive challenges by focusing resources and attention on certain customer, product or geographic market segments. They need to consider the type of business they want to conduct in each location and the practical operations required to sustain those businesses.
At the same time, the focus should be on compliance and efficiency. Reputation may be a competitive advantage in the future, with clients and customers drawn to firms with strong ethical reputations that are capable of meeting their needs efficiently.
There is no one-size fits all solution but there needs to be an overarching plan that takes long-term goals into consideration, prioritises compliance and efficiency, and recognises that regulatory changes are now firmly entrenched as part of business planning.
For more information see Accenture's report: Top 10 challenges for investment banks in 2016.
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