Presentation is about #RegulatoryCompliance that #Financial Institutions need to ensure today. While regulators continue to publish regulations to enhance consumer protection and address safety and soundness, Financial Institutions are under pressure to meet these regulatory obligations.

1. March 18, 2016
Managing Regulatory Requirements

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MANAGING REGULATORY REQUIREMENTS
Banks have on boarded more advanced and industry recognized case
management products, smart KYC process, smart analytics , global standard
data drivers, better data retention, review practices to strengthen
Regulatory compliance across all lines of business.
Financial Laws
and Regulations
• Model Risk Management
• Red Flags Rule
• Regulation V (FCRA) - Duties of
• Furnishers of Information
• Risk-Based Pricing Rule
 Basel III and Basel II (capital adequacy, stress
testing and market liquidity risk)
 Customer Identification Program (CIP), OFAC
and Anti-Money Laundering
 Comprehensive Capital Analysis and Review
(CCAR) and Dodd Frank Act Stress
Testing (DFAST)
BIS,
OCC,
FDIC, FRB
FDIC, SEC
DOI(Schedul
e 13D, 13G)
Key Laws and Regulations that Financial Institutions are required to follow
 Fair Debt Collection
Practices Act (FDCPA)
and Large Debt
Collection Participants
 FFIEC Guidance:
 Authentication in an Internet
Banking Environment
 Large Bank Pricing Rule
 Telephone Consumer
Protection Act (TCPA)
• Dodd Frank Act
• EMIR ( Trade Reporting)
• Public Interest disclosure Act
• The Sarbanes-Oxley Act
Compliance
• SEC Disclosure Obligations
CFPB, FDIC
under Dodd
Frank Act
CFPB

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Risk Governance
guidelines
Emergency lending
Authority
Stress Testing and
Capital Planning
Liquidity Rules or
large banks
Volcker Rule
Enhanced
Prudential
Standards
or large US
and foreign
banks
MILESTONES BANKS HAVE BEEN WORKING TOWARDS PER DODD FRANK ACT AND BASEL III
MILESTONES PER DODD FRANK ACT AND BASEL III

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REGULATORY REPORTING REQUIREMENTS FOR BANKS
Increase in
Regulatory
reporting
requirements
since 2009
Recovery &
Resolution
Planning: l
Information
on recovery
plan
Market
Disclosures:
Enhanced
Pillar 3
disclosures
Bank
Secrecy
Act/Anti
Money
Laundering
and Tax
Metrics
Reporting:
Document
compliance
with Volcker
Rule
Stress
Testing &
Individual
National
Supervisors
Macro
Prudential
Oversight

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CHALLENGES BANKS ARE FACING TODAY
How to become customer centric, keep focus on
culture of working on customer interests. Be
Flexible and still provide transparency, Manage
expensive product adoption pressure.
Drive RoE above cost of capital, Generate
capital through delivering on strategy , business
model and cost reduction
Meet Capital, Liquidity and resolvability
requirements.
Rebuild trust through cultural change and
improved risk governance.
How to become customer centric, keep focus on
culture of working on customer interests. Be
Flexible and still provide transparency, Manage
expensive product adoption pressure.
Drive RoE above cost of capital, Generate
capital through delivering on strategy , business
model and cost reduction
Meet Capital, Liquidity and resolvability
requirements.
Rebuild trust through cultural change and
improved risk governance.
Customers
Investors
Regulators

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WHAT IS COMING NEXT….
Resiliency and
Resolvability of
Global
Systemically
Important
Bank(GSIB)
GSIB Risk based
capital and leverage
surcharges
Simplificatio
n
• Internal
Modeling
restrictions
Higher
Standards
• Leverage ratio
trickle down to
smaller FIs
• Enhanced
Liquidity
Requirements
• Expanded
bail-in regimes
• Disclosure
requirements
to aid
comparability.
Capital
Accord
Alternative
s
• Stress testing
• Firm Wide
Leverage
Ratio
Capital
Requirements
Liquidity
Requirements
Disclosure
Requirements
National
Divergences
Data
Requirements
Risk Sensitivity
Competitive
Advantage
Implication on Banks

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CHALLENGE OF CHANGING AHEAD OF TIME
Banks that can sail above the waves of regulations and meet the shore of
Revenue Growth
Strategic and
Structural Change
Conduct and Culture
Data and Reporting
aggregation
Risk and
Governance
• Talent Plan
• Improved Business attitude
• Compliance approach , fully integrated into
corporate strategy
• Holistic approach, avoid compliance in silo
• Culture shift towards greater business integrity
• Manage and maintain large volume of data
• Risk Data aggregation
• Risk reporting practices
• Governance and infrastructure
• Supervisory review, tools, and cooperation
• Sound Risk Governance practices
• Risk appetite framework

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REGULATORY REFORMS
Adequate Capital ( Increased quality and quantity of capital cushion)
Basel 3(Global) CRR/CRD 4
(Europe)
Dodd Frank (US) Capital Surcharges (FSB)
Liquidity( Sufficient liquid assets to meet a potential run on funds)
Basel 3(Global) CRR (Europe)
Governance (Boards have sufficient skills , experience and availability)
MiFiD 2(Europe) CRR/CRD 4 (Europe) EBA Governance Guidelines (Europe)
Systemic Risk( Reduce risk to financial stability)
Capital Surcharges
(FSB)
Crisis Management
proposals (US,EU)
Dodd Frank
(US)
Structural change
(US , UK, Germany
, France)
Federal Reserve
Bank proposals
(US)
Supervision( Banks are supervised per size and complexity of their business)
New supervisory structures 9US,
UK and Europe)
More Intrusive and chalenging
supervision
Dodd Frank (US)
Remuneration(Regulate excessive remuneration practices)
FSB principles on remuneration (Global) Dodd Frank (US)

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Regulatory Reforms
Customer Treatment ( Customer protection)
MiFID (Europe)
CASS Directive
(Europe)
Dodd Frank (US) RDR (UK) PRIPs (Europe)
Traded Markets( Reduce risk & regulate the OTC derivatives market)
EMIR (Europe) MiFID (Europe) Dodd Frank (US) G20 (Global)
Financial Crime and Tax( Prevent Market abuse and financial crime. Ensure
investors comply with relevant tax authorities.)
FATCA (US) FTT (Europe) MAD/MAR(Europe)
Anti-Money Laundering
(AML)
Accounting and Disclosure( Review accounting policies for revision and
additional disclosures. Provisioning of expected loss)
IFRS 9 CoREP
EDTF recommendations
endorsed by G20 and FSB
Financial Instruments and Leasing
Convergence projects
Mortgage( Tracking exposure of bank on each position with clients )
Dodd Frank Act

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REGULATORY REQUIREMENTS
• Financial Crime
• Customer
Treatment
• Consumer
Protection
• Traded Markets
• Real time
transaction
reporting
• Stress Testing
• Liquidity
• Capital
• Structural Change
• Behavioral Change
• Accounting and
• Disclosure
• Governance
• Supervision
• Reporting
• Remuneration
Governance
and
Supervision
Systemic
Risk and
Capital
buffers
Customer
Focus
Market and
Compliance

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REGULATIONS RELATED TO AML/KYC
Anti Money
Laundering
• Bank Secrecy Act of
1970 (BSA)
• Currency
Transaction
Report (CTR)
• Monetary
Instrument Log
(MIL)
• Suspicious Activity
Report (SAR)
• USA Patriot Act
• To determine and
punish terrorist act
in united states
Employee
Compliance
• INRA 351 reporting
requirement
• SEC regulation D (
Fair Disclosure)
Gifts and
entertainment
received
• Eliminates biased
decision making
Disclosure of
Interest
• Schedule 13
G(USA)
• Schedule 13 D
(USA)
• TOP Reporting (UK)
• SIR/GOM/SIM (
Others)
KYC/Enhanced Due
Diligence
• KYC guidelines in
RBI (India)
• KYC laws enacted in
2009 ( New Zealand)
• Financial Intelligence
Center Act 38 o
2001(FICA)
• Money Laundering
Regulations 2007
governing KYC
rules(UK)
• USA Patriot Act of
2001 (USA)

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Thank You
Lalita.Syal@genpact.com
www.genpact.com

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 Federal Deposit Insurance Corporation (FDIC): insures bank deposits, approves mergers, and audits banking practices
 Federal Reserve System (the FED): regulates banking; manages the money supply
 Federal Trade Commission (FTC): ensures free and fair competition and protects consumers from unfair or deceptive
practices
 Securities and Exchange Commission (SEC): administers federal laws concerning the buying and selling of securities
 Office of the Comptroller of the Currency (OCC) :
 Financial Industry regulatory Authority (FINRA) :
 Commodity Futures Trading Commission (CFTC):
 National Credit union Administration (NCUA):
 Office of thrift Supervision (OTS)
 Consumer Financial Protection Bureau (CFPB):

 Subject to the regulation and supervision of the state regulatory agency of the state in which they were chartered
 Subject to the Federal Regulation (FDIC)
Federal Financial Institutions Examination Council (FFIEC):establishes
uniform principles, standards, and report forms for the other agencies.
Regulations for State-Chartered banks and certain non –bank
affiliates of federally chartered banks
Other Regulatory Authorities in US
US REGULATORY BODIES GOVERNING BANKS
Federal Regulatory Agencies for Federal Reserve Banks

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 European Banking Authority (EBA):
 European Insurance and Occupational Pensions Authority (EIOPA):
 European Securities and Markets Authority (ESMA):
 European Systemic Risk Board (ESRB) :
 Financial Conduct Authority (FCA) :
 Prudential Regulation Authority (PRA)
European Central Bank (ECB):Council Regulation (EU) No 1024/2013 of 15 October 2013 confers
specific tasks on the European Central Bank concerning policies relating to the prudential
supervision of credit institutions
European Supervisory Authorities part of European System of Financial
Supervision (ESFS)
Regulatory Authorities in United Kingdom
EU REGULATORY BODIES GOVERNING BANKS