The principles mentioned in my previous posts and the urgency bank management may feel regarding their implementation is very much tied to the laws and governance culture under which the financial institution operates. In certain jurisdictions recently launched
regulations may insist on tighter controls such as detailed reporting in accordance with the financial institution’s internal policies as well as in conformance with regulatory bodies bequeathed as of late with increased responsibilities and heightened supervisory
duties. Another fresh regulatory requirement demanding attention is including stress testing into your bank’s standard analytical procedures. For example, the Financial Service Authority now expects firms to develop, implement, and activate a robust and effective
stress testing program that assesses their ability to meet capital and liquidity requirements in the stressed conditions as a key component of effective risk management. Without specific instructions, each financial institution may comply with this
regulation by creating its own individual approach.
Notwithstanding the specifics, management will certainly concur that a wave of regulation is inevitable, in fact, it has already begun. Along with that wave comes the issue of ‘How?’, and more importantly, ‘What will it cost?’ The way to enable your financial
institution to cope with new regulations quickly and economically is to find and implement a system that is agile, and highly flexible, where reporting requirements may be accommodated with ease and bank procedure configurations adjustable so as to comply
with the regulatory winds of change.