Navigating 2024's Regulatory Landscape: Priorities for Financial Firms in Risk, Consumer Protection, and Digitalization

How Financial Firms Can Prepare for the 2024 Regulatory Landscape: Prioritizing Prudential, Consumer Impact, and Digitalization for Success

In an era of heightened geopolitical tension and economic volatility, interpreting rapidly evolving regulations is more critical than ever. Building on our previous insights from this year's regulatory outlook, recent non-systemic bank flures have emphasized the need for fir reassess risk management strategies, particularly focusing on liquidity and crisis response mechanisms.

2024 holds several key priorities for financial institutions:

1. Engaging Proactively with Regulators on New Prudential Developments:

   The flure of banks has led regulators to re-examine how technology impacts consumer behavior, necessitating more sophisticated stress testing methodologies that incorporate non-financial risks. Firms should engage proactively with regulatory bodies to understand evolving vulnerabilities and anticipate themes impacting the sector.

2. Enhancing Resolution and Recovery Strategies:

   Following lessons from previous crises, firms have strengthened capital and liquidity standards to remove expectations of government support. The U.S., for example, is emphasizing liquidity risk management, while European banks are building frameworks capable of forecasting net liquidity positions by 2024. Firms must continue refining their resolution planning processes and recovery strategies.

3. Prioritizing Consumer Protection:

   Central banks are updating consumer protection codes to ensure firms prioritize the best interests of customers when introducing new products or services. Focusing on marketing through alternative channels like social media can provide a more level playing field for financial players while addressing regulatory expectations centered around product impact and pricing.

4. Combatting Financial Crime and Fraud:

   As technology advances, so do threats such as investment scams exploiting economic stressors that push consumers towards risk-taking behavior. Firms must leveragesolutions to detect fraud and combat crypto-related crimes more effectively than their competitors in other industries.

5. Operational Resilience:

   The flures of certn banks have underscored the importance of operational resilience beyond mere compliance exercises; it should now be viewed through a lens that protects consumers by mitigating cyber risks and enhancing cyber resilience across financial services sectors.

To navigate this complex regulatory landscape successfully, firms must prioritize several core areas:

1. People: Invest in skilled staff capable of understanding and implementing new regulations.

2. Processes: Streamline operations while mntning efficiency.

3. Data: Leverage data analytics for informed decision-making and risk management.

4. Technology: Utilize advanced technology liketo enhance risk oversight, fraud detection, and overall operational resilience.

EY's Global Regulatory Networkcomprised of former regulators and bankers from diverse regionsprovides strategic insights on evolving financial regulations that can help firms adapt effectively and proactively address upcoming challenges.

In , the coming year presents both opportunities for growth and significant regulatory hurdles. By focusing on people, processes, data, and technology, financial institutions can better align their strategies with emerging priorities like prudential oversight, consumer protection, and digital transformation to thrive in this evolving landscape.

---

Legal :

EY refers to Ernst Young Global Limited, a UK company limited by guarantee, which operates under the EY brand. This organization does not provide services directly to clients but rather oversees a network of member firms that offer professional services globally.
This article is reproduced from: https://www.ey.com/en_gr/banking-capital-markets/how-firms-can-respond-to-the-2024-regulatory-landscape

Please indicate when reprinting from: https://www.be91.com/Trust_products/Regulatory_Landscape_2024_Financial_Firms.html