The G20 leaders’ financial reform and its impact on EU banks’ back-office function

Abstract

The 2008 financial crisis and the financial reform, which was implemented in
response to this financial crisis by the G20 Leaders, have significantly
changed the environment in which the banks’ back offices must operate and the
requirements which they must fulfil. They must continue to increase regularly
and incrementally the efficiency of their processes and procedures. However,
they must now also play a major role in the implementation of the financial
reform and fulfil new comprehensive and complex regulatory requirements that
are being developed since the end of the previous decade. In this new
environment, a merely incremental strategy has become insufficient. Instead,
this article considers that banks’ back offices have to follow a holistic and
in depth strategy, and use a broad set of tools for change. The
implementation by the back offices of the new requirements has to be
approached as an opportunity for a fully fledged review of processes and
procedures, considering the new requirements as both legal obligations and
also opportunities to review business models and support the overall strategy
of the banks. The following three strategic operational objectives should be
sought: enhance operational processes, increase efficiency of collateral and
cash management and improve data quality.