President-elect Trump’s victory has been called everything from
white-lash. He is a question mark, especially with regard to financial institutions (FI) policies.
Trump’s advisors are a blend of conservatives and populists. He may roll back banking regulation, as he promised
to do with Dodd-Frank because it created unjust burdens on community banks. He may modify regulatory governance, by replacing the singular head of the CFPB or adding a committee and Congressional oversight to the bureau. He may revive regulation,
such as Glass-Steagall, which separated commercial and investment banking.
Others who rode on his coat-tails are less enigmatic. As the GOP held the Senate, Sen Mike Crapo (R-Idaho) is expected to lead the Senate Banking Panel next year. He also favors
regulatory relief to smaller institutions. He will succeed if he can continue bi-partisan compromise with Democrats, including far-left Sen. Elizabeth Warren (D-Massachusetts), and bi-cameral compromise with further-right Republicans, including House Financial
Services Committee Chairman Jeb Hensarling (R-Texas).
Politics, and the lenses through which voters view the world, shift with elections. But fundamental business needs rarely change. FIs always need to satisfy customers, grow revenue, reduce costs, move faster and understand more. Certain components of data
and software solutions that will always reign in cycles of regulation or de-regulation:
1. Speed, or the ability to quickly — some say instantly — find data and assemble reports easily consumed by managers
2. Uniqueness, as it applies to proprietary rather than commodity data, whether collected in a fresh way or combined in a new way
3. Flexibility, or the capability to join disparate global data sources, organize them, and output the results to a variety platforms operating in different time cadences
4. Analytics, or the blend of minds and machines to mine “big data” and draw conclusions presented in an understandable way, all while minimizing false positives
Solutions that do these things will always be in demand, though the demand will shift to new use cases and new value propositions.
Many banks, third-party payment processors (TPPPs) and third-party senders (TPSs) have already concluded de-regulation opens up new, previously out-of-favor market segments. Those who choose to expand their risk appetites will need discipline.
Political surprises like the US elections and Brexit have been called, “citizens making decisions they
don’t fully understand.” The direction of regulations is anyone’s guess right now.
While businesses always operate under uncertainty, managers will render the best decisions they can muster. Banking solutions that enable managers to assemble data, quantify their choices and predict outcomes will be in high demand, regardless of regulatory