Regulatory changes, pressure on cost management, the need to grow, and increased investments in technology and data are dominating the financial services sector

The credit and financial services economy is currently facing additional major challenges due to the corona pandemic unlike anything seen in the history of post-war Germany. So many credit and financial service institutions are currently focusing on shoring up the resilience of their business. At the same time, climate change and the impact of Brexit cannot be ignored. Furthermore, the constantly changing regulatory requirements in the financial services sector continue to place enormous demands on market participants. In this new world, organisations that are operationally agile and possess strong infrastructure can use change and innovation to leverage potential and to exploit market opportunities.

These are the topics you should be focusing on right now:

Sustainability of business models

In the past, regulatory stipulations on solid capital and liquidity buffers were created and developed to reduce the impact of sudden events. The spread of the coronavirus affected the global economy to such an extent that is it not yet possible to make a final assessment. Against this backdrop, credit institutions are well advised to examine their risk profiles, their operational models and their strategic approach in order to be able to control the financial impact. In future, banking supervisory bodies will likely question and examine the sustainability of business models much more strictly.

Resilience of the financial services sector

Credit and financial service institutions need agility and resilience in order to meet changes in customer needs. Resilience plans will most likely depart from traditional disaster recovery approaches to the maintenance of offices, and the focus will shift to remote working models. This development will lead to higher requirements on cyber-security in order to avoid cybercrime, phishing and violations of data protection regulations.

New office and bank strategies

Agility goes beyond working from home, and fungibility is one of the central topics that will concern banks and financial service providers for some time to come. Greater flexibility of roles fosters the operational resilience of companies, and will in all likelihood become part of the new normal. In future, working from home will become a major component of the business models of many banks and financial service institutions, and will lead to workers being more spread apart.

Accelerating the reduction of costs and restructuring

In the course of their development, banks and financial service providers have reduced costs, and to some extent undertaken wide-ranging restructuring projects. Alongside this, they will increasingly be using innovative approaches to outsourcing. Many of these concepts will have to be modified in the long-term, since they have to be continually adapted to match the macroeconomic environment and have to be further developed with respect to risk management.

Grant Thornton Germany offers you in-depth expert knowledge in advisory and audit-related issues so that you can act successfully in today’s financial services market and, at the same time, set the right course for tomorrow.

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