Banks that take a wait and see approach to Basel IV are likely to face higher costs and added travails in implementation, as well as fewer commercial benefits in the years ahead. That's according to a new white paper from Wolters Kluwer's Finance, Risk Reporting (FRR) business that reveals how banks can adopt a path to greater productivity and profitability, becoming a "better bank," not just a more compliant one.
The white paper, "Basel IV Your Path to a More Profitable Business," notes how the deadlines for implementing the latest round of Basel guidelines have been delayed to help institutions cope with the personal and commercial toll of the COVID-19 pandemic. As immense as the toll is likely to be, and as urgent as resolving issues related to the pandemic are, banks should not lose sight of the importance of preparing for Basel IV and the many difficulties it will create along the way. New or revamped technology will be required. New or revamped thinking and organizational structures will be required, too, and, as the white paper discusses, not just during the implementation phase, but long after.
The message encapsulated in the phrase "Basel IV for business" has been articulated for years by Wolters Kluwer as financial supervision has evolved through IFRS 9/CECL and earlier Basel Committee guidance. The continued emphasis on forward looking analysis and a holistic, collaborative organizational structure for compliance and reporting purposes, supported by data management capabilities designed along the same lines, can be leveraged for strategic planning and other commercial objectives.
"Success in streamlining operations and maximizing productivity and profit potential, and any edge gained over the competition, can reap especially great long-term rewards when achieved at times like these," commented Jeroen Van Doorsselaere, author of the white paper and Director of Value Propositions for Wolters Kluwer FRR. "Leaders of financial institutions have a lot on their minds these days, but there is a persuasive case to be made right now for seizing the opportunity presented by Basel IV for business. If banks can devise a solid plan and handle implementation and execution urgently and appropriately, they will find that Basel IV compliance is not an unavoidable cost of doing business to grudgingly write off, but an investment that can generate a healthy return."
To help with this Wolters Kluwer FRR clients are implementing OneSumX Basel IV the integrated regulatory compliance and reporting solution that helps financial firms achieve consistency and address interdependencies within Basel IV. Using a single source of data for finance, risk and regulatory reporting that is enriched with value-added content from Wolters Kluwer's in-house experts, OneSumX for Basel IV helps remove barriers triggered by traditional silo structures and generates a deeper insight for the entire enterprise.
Wolters Kluwer FRR, which is part of Wolters Kluwer's Governance, Risk Compliance (GRC) division, is a global market leader in the provision of integrated regulatory compliance and reporting solutions. It supports regulated financial institutions in meeting their obligations to external regulators and their own board of directors.
Wolters Kluwer FRR receives frequent independent recognition of its excellence and innovation, celebrating a record year for award wins in 2019. Risk magazine recently awarded the company its coveted Regulatory Reporting System of The Year Award for the second year running and Waters Technology has named the company the Best Market Risk Solution Provider in its annual Technology Rankings. Wolters Kluwer FRR is also the #1 provider in both Regulatory Reporting and Liquidity Risk according to the RiskTech100, as compiled by Chartis Research.
Wolters Kluwer's GRC division is leveraging its product innovation and domain expertise to help the financial services industry respond to the COVID-19 pandemic. Its Compliance Solutions business, for example, offers Paycheck Protection Program Supported by TSoftPlus to support stimulus loan applications and loan forgiveness processes under the Coronavirus Aid, Relief, and Economic Security Act or U.S. CARES Act. Wolters Kluwer Lien Solutions, meanwhile, has also recently established a technology solution specifically designed to help U.S. lenders navigate Paycheck Protection Program loan applications, and associated compliance and risk mitigation requirements, resulting from the CARES Act. The Business Entity Search for CARES Act solution conducts bulk/batch corporate identity searches to verify the business status of potential borrowers.
About Wolters Kluwer Governance, Risk Compliance
Governance, Risk Compliance (GRC) is a division of Wolters Kluwer, which provides legal and banking professionals with solutions to ensure compliance with ever-changing regulatory and legal obligations, manage risk, increase efficiency, stay competitive and produce better business outcomes. GRC offers a portfolio of technology-enabled expert services and solutions focused on legal entity compliance, legal operations management, banking product compliance, and banking regulatory compliance.
Wolters Kluwer N.V. (AEX: WKL) is a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. Wolters Kluwer reported 2019 annual revenues of €4.6 billion. The company, headquartered in Alphen an den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide.
Director of Global Corporate Communications, Banking Regulatory Compliance
Governance, Risk Compliance
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