What EY can do for you

The GRN, along with EY’s risk and compliance consulting professionals, helps the C-suite and board-level bank executives respond to constantly changing financial and nonfinancial risk management, operational and governance requirements. In times of crisis, such as we’re experiencing now with the COVID-19 pandemic, the GRN advises financial institutions, as well as governments and regulators, on what actions they can take to mitigate the financial impact of the crisis. 

As digital reshapes financial services, risk strategies must continue to evolve. Banks that succeed will excel at proactively addressing the impact of digitization on compliance, accountability, transparency, risk management and data governance. Advising clients on how to meet these challenges, the GRN provides insight on a range of issues, including:

• Risk and compliance management frameworks, and allocation of resources
• Understanding the global, regional and local regulatory agendas
• Prioritization of issues, and identifying what’s next and beyond
• Input to senior executives on matters of accountability and governance
• How to build positive dialogue and relationships with the regulator 
• Linking the risk and regulatory environment to the wider geopolitical landscape.

Our regulatory outlook for 2021

After a year dominated by a global pandemic and the consequent disruption to financial markets, supervisory processes and policy agendas, in its 2021 Global bank regulatory outlook the GRN looks at the immediate environment (‘Now’) and a little further ahead (‘Next and Beyond’) to identify likely future regulatory action.

Although the financial services industry is considerably stronger than during the 2008 crisis, the upheaval caused by the pandemic has tested risk management capabilities and regulatory responses. In 2021 the immediate priority is likely to be around supervisory and policy actions designed to address the impact of Covid-19, balancing an appropriate level of compliance and risk controls with the need to support governments in creating a financial market environment that can assist economic recovery. After that we will see regulators returning to several key agendas; conduct risk, climate risk, digital, operational resilience, data protection, cybersecurity and financial crime. 

Against this backdrop, key participants will face a range of challenges:

• Market regulators and policymakers will need to identify and collect new, standardized data sets that can inform policymaking, allowing the new frontiers of technology and environmental, social and governance (ESG) to expand while maintaining appropriate levels of resilience and risk sensitivity.
• Central banks will need to consider the lessons learned and consider amendments to the supervisory framework going forward. Some of these may include new approaches to understanding the effects of contagion in financial markets (especially in the non-banking space), refinements to stress testing and a crisis policy framework that incorporates a financial markets response.
• Firms will need to maintain risk and compliance standards, implement digital transformation and at the same time settle on an efficient set of operations that accommodate more remote and flexible working and can be responsive to similar crises in future. An additional factor will be the extra priority given by regulators to sustainability, diversity, inclusion and wider corporate responsibility.