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Accenture 2015 Global Structural Reform Study: Unlocking the Potential of Global Structural Reform

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As they reshape the financial services industry in light of the 2007-2008 financial crisis, global regulators have introduced a series of structural reform regulations to help build resilience. Global Structural Reform (GSR) is creating a new financial services ecosystem for institutions.

Accenture’s 2015 Global Structural Reform Study finds senior management working to thrive in what amounts to an all-new financial services landscape. They are investing effort and funds in their response to GSR, but their focus is on meeting regulatory demands. While that represents a good starting point, our study finds institutions might be missing out when it comes to meeting the strategic implications of reform and using reform as an opportunity to reposition the organization for sustainable growth

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Accenture 2015 Global Structural Reform Study: Unlocking the Potential of Global Structural Reform

  1. 1. Accenture 2015 Global Structural Reform Study Unlocking the Potential of Global Structural Reform
  2. 2. 2 The financial crisis of 2007-2008 highlighted the dangers of a financial system that was improperly aligned with the goals of systemic risk management. Since the crisis, global regulators have sought to re-shape institutions to be more resilient through a series of structural reform regulations. Today, Global Structural Reform (GSR) is presenting an even more complex ecosystem for financial institutions and, as such, constitutes a key agenda point for senior management driving the future strategy of their post-crisis institutions.
  3. 3. 3 Accenture’s 2015 Global Structural Reform Study – based on a survey of 131 banking, insurance and capital markets institutions across regions – confirms that, while institutions are investing in their response to GSR, their plans still appear focused on meeting regulatory demands alone, rather than accounting for the more strategic implications of structural reform. Our study concluded: GSR is re-writing the financial services landscape Publication of regulations related to structural reform continues at a relentless pace, with rules often developed at a jurisdictional level without clear convergence. In our view, it seems inevitable that the financial services landscape will be re- written given the cumulative impact of GSR, especially for internationally active banks, meaning that reliance on traditional ways of working will no longer be viable. As a result, institutions will be faced with hard choices about their post-crisis business model. Investment is clear, but strategy less so The sheer volume of GSR regulations and the complexity of changes they demand is driving significant investment in talent and technology as institutions organize their responses. Our experience suggests a need to validate whether strategic planning will fully account for the strategic implications of GSR, going beyond mere compliance and delivering long-term value for the institution. Unlock the potential of GSR GSR regulations are adding further complexity to a landscape already beset with macroeconomic and industry disruptions. Institutions cannot continue to solve for point regulations without considering other competing or complementary forces. There is no one solution for responding to this challenge; however, our experience suggests three principles to help extract greater value from the investment made: 1. Organize a long-term response Institutions need to think end-to-end across regulations, businesses and geographies, and be holistic in assessing and communicating impacts across the operating model to make smart investments and avoid multiple, competing projects. 2. Unlock potential in a new ecosystem Remaining competitive and viable in the long term will require institutions to identify and capture the potential for innovation and improved financial performance provided by the new ecosystem. 3. Demonstrate value to key stakeholders The value of GSR can only be realized if planning is effectively adopted throughout the business. As firms move past initial compliance, further tuning of the new operating model will be needed to help retain engagement and support from internal and external stakeholders. Time for bold, strategic thinking GSR is much more than another set of regulatory requirements. To help their institutions remain competitive and viable for the long term, senior management should approach structural reform with the same bold, strategic thinking as they are using for other industry challenges.
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  5. 5. 5 GSR is Re-writing the Financial Services Landscape Rule-making in recent years has been prolific, as regulators in individual jurisdictions have sought to re-shape financial institutions to add greater resilience to their operations. As a result, rules have often been developed at a jurisdictional level without clear convergence. This persistent wave of GSR regulations does not appear to be abating, and, with its cumulative impact, reliance on traditional ways of working — and on the infrastructure to support such ways — will no longer be viable. This, we expect, should leave institutions facing some hard choices about their post- crisis business model. Previous industry commentary from Accenture, for example, has indicated that capital allocation across different business lines will be more heavily scrutinized with a particular focus on cross-entity flows.1 Seventy-one percent of the 2015 Global Structural Reform Study respondents agree that smaller institutions may fall out of the market as they fail to keep pace with these new market drivers. The pressure will also be felt by larger institutions. Accenture’s recent Banking 2020 report highlighted the possibility that full-service banks may collectively face losses of as much as 35 percent of their market share by 2020 if they fail to adjust to industry disruptors.2 Institutions are starting to tailor their responses, with three trends beginning to define how the industry could be affected by GSR. Geography Developing tailored propositions by geographic market to help drive efficiency in the use of scarce capital. Deutsche Bank AG3 recently announced its plans to capture more market share in the United States and the Royal Bank of Canada also announcing plans to expand its US Wealth presence through the recent acquisition of City National Corporation.4 Products Developing a more targeted set of offerings that allocate capital to those business lines able to generate appropriate returns on equity, with other products potentially discontinued. Barclays PLC’s recent Group Strategy update highlighted similar themes, for example, the stated aim of re-allocating capital towards growth businesses.5 Client mix Targeting more profitable client segments and exiting relationships requiring higher costs to serve. Last year according to news articles, Bank of America Corporation parted ways with a large number of hedge fund clients in an effort to reduce costs.6 Figure 1. Projects in place to address regulatory requirements Does your organization currently have a project in place to address the regulatory requirements listed below? (Select all that apply) Comprehensive Capital Analysis and Review (CCAR) Risk planning Implement standards, process and procedures to avoid conflicts of interest Implement new technology units Ensure compliance of information and restrict/unrestrict advice Submit implementation plan Implement operational process and margining, for all bilateral over-the-counter (OTC) derivatives Liquidity Coverage Ratio Capital planning Enhance client protections Formation of Intermediate Holding Company (IHC) Implement new risk management standards Implement new governance model Legal entity restructuring Implement product governance standards to ensure Treating Customers Fairly (TCF) Living will/safeguard client assets Report derivative trades Implement conduct risk domestic/local rules Implement a process to clear via a Central Counterpart Clearing House (CCP) Sequestration 63% 50% 47% 42% 40% 40% 39% 39% 37% 34% 34% 34% 32% 31% 29% 28% 28% 26% 25% 23% Source: Accenture 2015 Global Structural Reform Study
  6. 6. 6 Figure 2. Forecasted technology and non-technology spend What is your organization’s anticipated technology and non-technology spend (in USD) for FY14, in order to address the global regulatory change requirement? Source: Accenture 2015 Global Structural Reform Study 16% 13% 16% 18% 16% 10% 27% 20% 4% 20% 17% 23% >$500m $250m - $500m $100m - $250m $10m - $100m $1m - $10m $0m - $1m Technology Spend Non-Technology Spend Investment is Clear, but Strategy Less So The sheer volume of GSR regulations and the complexity of changes they demand is driving significant investment as institutions organize their responses. Over half of financial institutions surveyed as part of the Accenture 2015 Global Structural Reform Study are forecasting investment of over $100 million for technology, and over $100 million in non-technology-related spend (Figure 2). Such investment seems warranted when one considers that fewer than one-quarter of survey respondents are today compliant with key GSR regulations such as Dodd- Frank Section 165 or Basel III (Figure 3). This investment is prompted, in part, by a forecasted increase in headcount by surveyed institutions, either as contingent staff to deliver required change activity or as new, permanent staff that will run a much- changed business (Figure 4).
  7. 7. 7 Note: Due to rounding, total may not equal 100 percent Source: Accenture 2015 Global Structural Reform Study Figure 3. Levels of compliance across key regulatory requirements At what stage is your company currently in with regards to becoming compliant with these regulations? (Select one for each) Reviewed the regulation 10% 22% 31% 14% 24% 24% 24% 24% 24% 24% 22% 22% 22% 21% 21% 11% 7% 7% 7% 7% 7% 8% 8% 8% 18% 18% 16% 16% 16% 35% 34% 37% 31% 25% 11% 29% 29% 15% 15% 15% 24%5% 24% 22% 26% 26% 6% 6% 20% 28% 25% 21% 23% 23% 22% 17%30% 30% 34% 34% 28% 28% 18%11% 15% 30% 26% 26% 4% 19% 23% 32% 21% 18%26%6% 30% 21% 20%9% 20% 29% 24%Assessed the impact on business Projects rolled out Identified projects Identified projects Reviewed the regulation Assessed the impact on business Projects rolled out Reviewed the regulation Identified projects Assessed the impact on business Projects rolled out Reviewed the regulation Projects rolled out Identified projects Assessed the impact on business Ring Fencing/ Liikanen Markets in Financial Instruments Directive (MiFID) II/Markets in Financial Instruments Regulation (MiFIR) Alternative Investment Fund Managers Directive (AIFMD) Undertakings for the Collective Investment in Transferable Securities (UCITS) IV 19% 17% 17% 17%17% 17% 48% 29% 30%26%Reviewed the regulation Identified projects Projects rolled out Assessed the impact on business Dodd-Frank Section 165/6 Not yet stated Planning Implementing Compliant Assurance/validating project functionality (QA process) 21% 19%2% 4% 4% 14% 14%
  8. 8. 8 Note: Due to rounding, total may not equal 100 percent Source: Accenture 2015 Global Structural Reform Study This reported investment is significant and raises the stakes for senior management to help provide responses that are appropriate and focused. Our experience suggests there is a need to further validate whether plans would fully account for the strategic implications of GSR. Delivering long-term value for the financial institution will require a shift beyond a point-regulation approach to one that considers other competing regulations or broader forces in the market place. In our view, GSR regulations are adding further complexity to a landscape already beset with macroeconomic disruptions. Pressure on margins, which have halved from pre- crisis levels for European investment banks;7 customers expecting resources to be “fingertip-ready”;8 and industry disruptions from the rise of digital technology and new entrants present a volatile landscape. Making this landscape harder to navigate with ongoing GSR regulations creates a conundrum that institutions need to solve to be viable in the long term, and to facilitate creating value from investments made. Figure 4. Forecasted spend on full-time employees How many full-time employees (FTEs) will your organization dedicate to business (non-technology and technology) change for FY14, in order to address the global regulatory change requirements? 20% 15% 10% 4% 18% 25% 8% 25% 17% 11% 22% 3% 5% Technology FTEs Non-Technology FTEs 16% >300 250 - 300 150 - 250 100 - 150 50 - 100 25 - 50 1 - 25
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  11. 11. 11 In our view, institutions cannot afford to adopt a wait-and-see approach in their response to the challenges presented by GSR. They should act quickly to seize the opportunity and not lose time strategically repositioning the organization, while remaining focused on solving for the ongoing pressures of regulatory compliance. There is no one solution for responding to this challenge, and each institution’s response should be unique to its strengths and weaknesses as well as its future business expectations. However, our experience suggests the following three steps should be considered: 1. Organize a long-term response Institutions need to think end-to-end across regulations and geographies, and be holistic in assessing and communicating impacts across the business and operating model, both to streamline the change response and to identify smart investments. Ninety-six percent of the 2015 Global Structural Reform Study respondents cite the definition of a clear strategy and objectives as important to driving an effective response. Accenture sees seven major pillars of structural reform that are forcing change across each jurisdiction in which financial institutions operate. These can provide a framework for developing a longer-term plan. The chart that follows identifies the pillars and highlights some of the key regulatory requirements these structural reforms help address. Unlock the Potential of GSR
  12. 12. 12 Scrutiny from Domestic Regulations Governance of Legal Entities Stricter Stress Testing Description Institutions have less jurisdictional flexibility and need to solve for each set of requirements within the countries in which they operate. This is critical for addressing the bespoke expectations of each regulator. Institutions need to address and manage these requirements both today and in a sustainable manner going forward. Institutions need to think about how legal entities will be governed in the jurisdictions they continue to operate in, potentially requiring a shift in ultimate responsibility for daily operations of the business between an institution’s global parent and the geographic legal entity structure. Institutions face an increase in the requirements to evidence comprehensive and effective risk management, as confirmed by recent feedback from the Federal Reserve’s 2015 stress testing at the legal entity level.9 Regulators are increasingly focused on comprehensive risk reporting by legal entity, in turn placing emphasis on the quality and completeness of institutions’ data architecture. Example of Regulatory Requirements • Securities and Exchange Commission 15a-6 requires a revised control framework. • The Federal Financial Institutions Examination Council call reporting. • Alternative Investment Fund Managers Directive creates regulations on alternative investment funds. • Markets in Financial Instruments Directive syncs European Union (EU) investment services regulations. • Office of the Comptroller of the Currency-12 (Code of Federal Regulations) CFR 30 and 170 establishes a new framework for risk governance. • Dodd-Frank (DF) Section 165 mandates that Foreign Banking Organizations (FBO) establish senior management governance, US chief risk officer, and US risk committee. • Demand for enhanced governance and oversight by the Office of the Superintendent of Financial Institutions (OSFI). • With DF Section 165 FBOs subject to the same stress testing requirements as a domestic US banking entity. • European Banking Authority Stress Test provides an EU- wide stress test methodology and scenarios. Seven Pillars of Structural Reform
  13. 13. 13 Capital and Liquidity Adequacy Recovery and Resolution Planning Separation or Cessation of Activities Geography Focused Finance Local and global regulations are forcing institutions to operate within a more capital restrained environment. Institutions need to provide sufficient capital and liquidity to enable the business to compete effectively in the products they opt to continue offering in the marketplace. Enterprise-wide capital planning will be a key support in allocating capital as well as evidencing capital and liquidity adequacy to regulators. Regulators are ensuring stability of banking operations, for example making provision for state takeover in the event an institution becomes insolvent. Institutions need to invest time in developing and communicating a roadmap to facilitate recovery or orderly wind-down. Certain regulations are mandating ring-fencing of assets, for example between retail deposits and investment banking activities. These rules are enabling greater resilience to allow one legal entity or business line to potentially fail without causing systemic failure across the enterprise. Institutions are needing to consider re-orientation of their financial ledgers, performance management, and reporting to enable financial operations at the jurisdiction level. • Domestic and foreign entities utilize Basel III to calculate minimum capital requirements (FBO home country standards). • Collins Amendment sets a capital requirement floor at 10%. • Capital Requirements Directive IV delivers capital requirements that reflect Basel III rules. • Basel III standards adopted by OSFI’s Capital Adequacy Requirements Guideline. • New Liquidity Coverage Ratio. • Provisions made in DF Section 166 for domestic US banks, and in DF Section 165 for Foreign Banking Organizations Banking Act 2009 (UK) requires resolvability, recovery planning and provides for bank nationalization. • European Banking Authority issued a Recovery and Resolution directive on crisis prevention to enhance stability, protect depositors, and reduce moral hazard. • Volcker Rule seeks to cease proprietary trading. • The Independent Commission on Banking recommends separating retail deposits from investment banking activities. • Liikanen in the EU seeks to separate proprietary trading and strengthen governance regulations. • US Enhanced Prudential Standards requires FBOs to maintain a debt-to-equity ratio of no more than 15:1. • In the US, the Foreign Account Tax Compliance Act (FATCA) and the Standard for Automatic Exchange of Financial Account Information (GATCA) developed by the Organization for Economic Cooperation and Development (OECD). • COREP/FINREP as part of the European Banking Authority’s Capital Requirements Directive (CRD) IV. Source: Accenture analysis based upon publicly available documents, April 2015
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  15. 15. 15 2. Unlock potential in a new ecosystem Once regulatory needs and solutions are organized, institutions will need to think immediately about unlocking the potential value in changes and investments. In the case of major investments in change, institutions will need to closely consider the businesses they want to be in within this new financial services ecosystem. It will be too late to react when regulatory changes have been implemented. If institutions want to remain competitive and viable for the long term, the time to act is now. Our experience would indicate the following areas may help financial institutions unlock new opportunities for sustainment and competitive growth. • Think local, not global. Institutions need to consider the type of business they want to conduct in each of their locations and the practical operations required to sustain these businesses while best managing capital and costs. For multinational institutions, this would require aligning global capabilities with local capabilities in the jurisdictions in which they operate. This is a live discussion for many of our 2015 Global Structural Reform Study respondents, with 57 percent indicating they will tailor their geographic footprint in the next two years and half divesting geographic units, relocating their headquarters, or business units (Figures 5 and 6). This shift in focus may lead to considering new technologies to help improve efficiency and effectiveness, or new operational models that are not as cost, risk and capital-intensive. For example, we are seeing increased usage among our clients of managed services for know your customer (KYC) and post-trade processing utilities. • Aim for market-driven specialization. Institutions can address competitive challenges by focusing resources and attention on certain customer, product, or geographic market segments. Such specialization can be performed upon the basis of a common core of capabilities, and 48 percent of 2015 Global Structural Reform Study respondents indicate that they are indeed doubling down over the next two years on core competencies in response to regulatory change. We believe the benefit of focusing on core competencies is greater local market recognition and competitive advantage. • Focus on compliance and efficiency. Reputational risk could be a competitive advantage in the future, with clients and customers drawn to firms with strong ethical reputations that are also efficient in meeting their needs. To prepare for this possible opportunity, institutions should continue to integrate compliance into their core processes. Expectations from regulators should continue to increase in this area, with the Federal Reserve recently announcing the first examination of US banks regarding their level of compliance with the Volcker Rule.10 • Think with an innovation mindset. Institutions should keep pace or even outpace niche providers in accessing the revenue streams that reflect the needs of today’s customers or clients. In our experience, digital-driven payments and portfolio management companies are capturing greater market share, and may become material threats to the longer-term viability of institutions’ business if sufficient planning is not in place. Sixty-two percent of our 2015 Global Structural Reform Study respondents are addressing this concern by planning to launch new products or services within the next two years.
  16. 16. Launch new geographic units Focus more on core competencies Implement cost reductions Launch new products or service lines Merge or acquire other companies Increase headcount via utilizing contractors Divest geographic units Change pricing structure Increase headcount via outsourcing Relocate headquarters or business units Shutdown product or service line Change technology target operating model Decrease headcount 6 5 6 6 6 7 8 10 27 28 26 25 25 25 30 22 22 21 21 14 14 45 18 30 30 3029 29 36 36 25 29 29 3626 26 31 35 35 35 39 37 37 35 28 27 27 34 34 45 8 11 10 14 31 31 40 40 20 3119 19 19 18 17 31 23 23 38 19 39 8 8 10 15 13 16 8 25 32 29 35 26 32 40 33 30 43 35 34 35 29 29 41 30 25 27 21 24 26 15 17 16 9 7 9 13 19 6 9 7 19 17 21 8 23 37 56 27 42 39 50 51 46 37 41 47 42 40 20 13 35 25 26 35 28 30 28 28 17 37 23 33 24 29 21 17 9 11 17 17 15 15 13 15 7 7 9 11 10 16 16 16 16 23 25 7 25 36 42 24 18 36 27 37 36 18 28 27 38 27 30 26 42 45 33 40 28 31 51 40 25 33 34 27 26 24 25 Increase headcount via home office support 527 2610 36 31 33 31 12 54 21 13 16 27 36 22 Implement change management programs 28 26 2414 2932 3216 13 37 28 22 18 30 34 18 21 Increase headcount by hiring permanent staff 2728 2413 1335 40 21 20 35 24 20 7 42 36 16 Tighten risk management 249 3433 13 25 41 22 11 41 30 19 9 39 32 20 18 19 18 16 9 23 22 14 Global (%) (%) (%) (%) Banking Capital Markets Insurance Currently not planned Currently in discussion OngoingPlanned within the next 2 years 16 Figure 5. Industry response to regulatory changes What specific strategic changes will your organization implement in response to regulatory changes? (Select one) Note: Due to rounding, total may not equal 100 percent Source: Accenture 2015 Global Structural Reform Study
  17. 17. Global Asia Pacific Latin America North America Europe 6 6 7 8 10 27 28 26 25 22 22 21 21 14 45 18 30 29 36 36 25 29 29 3626 26 31 35 35 39 37 37 35 28 27 34 8 11 10 14 31 40 40 20 3119 19 19 18 17 31 23 3 9 13 13 13 6 14 13 6 18 20 3 20 32 41 25 33 30 52 31 27 32 43 37 30 23 35 9 31 30 27 39 41 33 52 21 17 47 37 29 41 31 23 30 3 14 27 10 18 27 20 20 3 11 13 13 13 8 14 13 21 11 26 11 21 39 53 18 24 50 32 43 47 18 42 47 39 39 21 24 45 32 24 37 24 29 42 34 16 34 32 37 13 24 32 13 24 19 11 18 13 11 16 8 10 7 7 10 7 3 7 10 23 24 3 34 24 48 30 23 21 30 33 37 23 13 21 38 21 41 14 37 50 41 30 27 40 40 37 34 41 21 24 31 33 20 28 33 37 17 27 27 21 17 24 10 3 7 18 11 14 7 19 29 11 7 26 48 36 34 30 29 25 46 36 33 21 41 34 30 7 25 31 30 21 36 21 21 22 29 26 38 26 34 39 31 33 27 2610 36 10 43 30 17 5 41 41 14 10 33 20 37 18 25 14 43 28 2614 32 6 32 39 23 26 26 24 24 10 37 23 30 11 33 26 30 32 28 2413 35 6 39 26 29 13 55 29 3 7 17 37 40 25 21 21 32 249 3433 10 39 23 29 13 42 34 11 1017 47 27 4 32 32 32 29 18 36 26 21 22 21 19 (%) (%) (%) (%) (%) 17 Figure 6. Regional response to regulatory changes What specific strategic changes will your organization implement in response to regulatory changes? (Select one) Note: Due to rounding, total may not equal 100 percent Source: Accenture 2015 Global Structural Reform Study
  18. 18. 18 3. Demonstrate value to key stakeholders The value of GSR can only be realized, in our view if planning is effectively instituted and adopted throughout the institution’s business. Broad, comprehensive stakeholder engagement is a key principle in mobilizing any response and for encouraging stakeholders to focus their energy on the strategic decisions required rather than lose confidence through a lack of understanding. As firms move past initial compliance, we also expect to see further tuning of the new operating model to promote this engagement and support from internal and external stakeholders (Figure 7). Establish compliance and communicate future strategy and operating model Develop foundational enhancements to address new structural reforms Establish revised steady state governance, processes, technology, and talent management Deliver ongoing enhancements Design and Early Implementation Embedding and Tuning New Operating ModelInitial Compliance Source: Accenture, June 2015 Figure 7. Demonstrating value to key stakeholders
  19. 19. 19 GSR is much more than another set of regulatory requirements. Institutions should embrace structural reform with the bold thinking demanded by the creation of a new ecosystem within the financial services industry. Institutions will need to move beyond solutions for point regulations to a more strategic mindset that accounts for other competing or complementary forces. The Accenture 2015 Global Structural Reform Study results indicate that financial institutions still have work to do to account for the full implications of GSR in their planning activity. Our current experience with clients facing the strategic challenges of GSR is that there is still time for effective decision making and action that can help position institutions to remain competitive and viable in the longer term. Time for Bold, Strategic Thinking
  20. 20. References 1. “How Banks Can Find Opportunity in a Flood of Regulations,” American Banker, November 10, 2014. Accessed at: http:// www.americanbanker.com/bankthink/how- banks-can-find-opportunity-in-a-flood-of- regulations-1071090-1.html 2. “Banking 2020: As the Storm Abates, North American Banks Must Chart a New Course to Capture Emerging Opportunities,” Accenture, October 2013. Accessed at: http://www.accenture.com/ SiteCollectionDocuments/PDF/Accenture- Banking-2020-POV.pdf 3. “RPT-Deutsche Bank bets big on U.S. for investment bank growth,” Reuters, March 2, 2015. Accessed at: http://www.reuters. com/article/2015/03/02/deutschebank- outlook-idUSL5N0W41S320150302 4. RBC to acquire City National Corporation, a premier U.S. private and commercial bank,” Royal Bank of Canada news release, January 22, 2015. Accessed at: http://www. rbc.com/newsroom/news/2015/20150122- rbc-nr.html 5. “Barclays PLC: Group Strategy Update – Building Barclays as the ‘Go-To’ bank,” Barclays, May 8, 2014. Accessed at: http://www.barclays.com/content/dam/ barclayspublic/docs/InvestorRelations/IRN ewsPresentations/2014Presentations/15- may-barclays-group-strategy-update.pdf 6. “BofA Said to Oust 150 Hedge Fund Clients Under New Rules,” BloombergBusiness, January 13, 2015. Accessed at: http://www. bloomberg.com/news/articles/2015-01-13/ bofa-said-to-oust-150-hedge-fund- clients-under-new-rules 7. “Shrinking margins and higher costs drive down investment banks’ returns”, Financial Times, November 4, 2014. Accessed at: http://www.ft.com/intl/cms/s/0/1ebb3d1c- 4e43-11e4-adfe-00144feab7de. html#axzz3VtU6lJPD (access required) 8. “The Everyday Bank – How Digital is Revolutionizing Banking and the Customer Ecosystem,” Accenture, January 2014. Accessed at: http://www.accenture. com/SiteCollectionDocuments/financial- services/accenture-everyday-bank.PDF 9. “Big Banks Struggle to Pass Fed’s ‘Stress Tests’,” Wall Street Journal, March 11, 2015. Accessed at: http://www.wsj.com/articles/ federal-reserve-rejects-2-banks-capital- plans-in-annual-stress-tests-1426105804 (access required) 10. “Volcker rule exam will look into banks’ structural data,” SmartBrief on Risk and Compliance, March 10, 2015. Access at: https://www2.smartbrief.com/servlet/ ArchiveServlet?issueid=25AC25BB-87AB- 420E-8DC3-5FD50869CE72&lmid=archives About the Authors Samantha Regan is a Managing Director in Accenture’s Finance & Risk Services. She has 17 years of global experience working with C-suite executives and their businesses in compliance and regulatory initiatives. Samantha is the North America Lead for the Regulatory Remediation & Compliance Transformation group within Accenture’s Finance & Risk Services practice. samantha.regan@accenture.com Venetia Woo is a Senior Manager in Accenture’s Finance & Risk Services, and serves as the offerings lead for both Global Structural Reform and Prudential Standards. She has extensive experience in leading restructuring, M&A and joint ventures formation activities for financial institutions. Venetia also specializes in advising large institutions in credit risk, counterparty and capital adequacy functions and is the co- author of “The Effectiveness of Regulatory Stress Testing Disclosures.” venetia.w.woo@accenture.com Ben Shorten is a Senior Manager in Accenture’s Finance & Risk Services, and serves as the Strategy and Target Operating Model offering lead for Regulatory Remediation & Compliance Transformation in North America. He has extensive experience working with C-Suite executives and their executive committees in Tier I investment banks and leading retail banking institutions in both the UK and the US to define and mobilize complex change delivery in response to government and regulatory mandate to change. benjamin.j.shorten@accenture.com Chris Beck is a Manager in Accenture’s Finance & Risk Services. Specialized in strategy planning, surveillance, operational risk management and compliance risk management, Chris brings his solid experience and skills in these areas to help financial institutions define and implement their governance and risk management structures. christopher.t.beck@accenture.com Acknowledgements The authors would like to thank Craig Unterseher, Laura Bishop, Haralds Robeznieks and Evan Goldsmith for their contribution to this document. About Accenture Accenture is a global management consulting, technology services and outsourcing company, with more than 323,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, 2014. Its home page is www.accenture.com. Disclaimer: This document is intended for general informational purposes only and does not take into account the reader’s specific circumstances, and may not reflect the most current developments. Accenture disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this document and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals. Stay Connected Accenture Finance & Risk Services: http://www.accenture.com/microsites/ financeandrisk/pages/index.aspx Connect With Us https://www.linkedin.com/ groups?gid=3753715 Join Us https://www.facebook.com/ accenturestrategy https://www.facebook.com/ accenture Follow Us http://twitter.com/accenture Watch Us www.youtube.com/accenture 15-1120 Copyright © 2015 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

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