Since the economic recession, financial companies have had to alter their operating model to one ingrained with customer service and forging trusting relationships.

Wednesday 19 February 2014, London

To obtain trust amongst their consumers and bring back stability to the economy, global financial institutions face a number of hurdles to overcome. Notably there are increased pressures on regulations such as Basel III and raising the required capital for the liquidity requirements set out within, consumer protection acts, a strengthened focus on the prevention of financial crimes while the impact on crucial business functions is likely to be varied.

As a response to the issues that came from the financial crisis across the major economies across the world, Basel III is an updated version of Basel II designed as a way for banks to address capital adequacy ratios, stress testing and liquidity risks. It is expected to enable banks to hold capital against market, credit and operational risks, and will consist of reform guidelines targeted at improving regulatory supervision and risk management for banks. Although these measures are designed to increase the strength of financial systems over the next decade, their financial impact on the banks could be harsh.

There is further regulatory pressure in particular regions such as America and Europe where there is the need to address domestic circumstances more effectively. For example in the US, The Dodd-Frank Wall Street Reform and Consumer Protection Act, 2010, regulators are putting a strong emphasis on stress testing to ensure banks are resistant in times of duress and also have the necessary quality of assets to fund cash outflows for a defined period of time.

With regulations forcing banks to adopt innovative solutions, card operations are likely to become quicker, easier and more consumer-friendly as well as safe guarded against fraudulent activity. It is likely that financial institutions are to change their corporate structures as to separate the functions of their investments and retail banking.