Times of crisis often prompt change and transformation, as we saw with the global financial crisis of 2008-09 and most recently, the COVID-19 pandemic.
Some changes are instant, as governments, institutions and individuals seek to manage the short-term impact of a crisis, while others are slower to materialise, but represent a more permanent shift. In this latest edition of Regulatory Readiness for corporate treasurers, Standard Chartered explores some of the fundamental changes in attitude towards risk, responsibility and opportunity, and how regulators are responding.
In 2009, with the most immediate impact of the global financial crisis still fresh in corporate memory, the Basel Committee on Banking Supervision introduced Basel III (or the Third Basel Accord) to strengthen regulation, supervision and risk management in the banking sector, and provide greater assurance and confidence to corporate and institutional clients. Since then, the Committee has continued to refine the regulation, which are now being finalised in the form of Basel IV (or Basel 3.1). Although the new rules will not take effect until January 2023, treasurers should consult with their banks early to understand the implications, particularly in areas such as trade finance. You can find out more about Basel IV here.
A major shift we have seen over the past decade is the drive towards e-commerce, with consumers and businesses alike embracing new ways to communicate, do business and consume products and services. As a result, we all now demand a convenient, instant experience when we engage or transact online.
Both driving and responding to this trend, we have seen the emergence of financial technology companies (fintechs), which have contributed to a very different payments landscape to that of a decade ago. This has led to a blurring of lines between the services traditionally offered by banks and those of non-bank players. By introducing the new rules, regulators aim to increase competition and innovation in banking services. These aim to give greater choice and protection to consumers, and greater flexibility in how corporations connect with, source data and exchange transactions with banking partners and third-party payment gateways. Find out more about open banking here.
The massive growth we have seen in e-commerce and new payment opportunities are facets of the broader shift towards digitisation. This has increased dramatically since the start of the COVID-19 pandemic, with a shift to remote working and an acceleration in the adoption of digital tools and business models resulting from an extended period of social restrictions. Likewise, however, the increase in digitisation has proved an opportunity for cybercriminals to step up their activities, exploiting new working practices, business models and human anxieties. To help organisations of all sizes protect their assets and data, staff and clients, regulators are introducing measures to help businesses protect core applications and networks, ensure resilience, and put in place response and recovery plans. You can find out more about measures to help defend against cybersecurity risks here.
These primers are just one part of Standard Chartered’s toolkit to help corporations of all sizes to understand and mitigate their changing risks, identify and leverage new digital opportunities, and build robust digital infrastructures that enable them to be agile and resilient during good times and bad. Please don’t hesitate to contact your relationship manager for more information. You can also learn more about some of the main regulations impacting treasury and what you need to consider to prepare for them through our Regulatory Readiness series here.
Michael Spiegel Global Head of Transaction Banking
The massive growth we have seen in e-commerce and new payment opportunities are facets of the broader shift towards digitisation.
Opening access to banking data and payments
Rising to new cybersecurity challenges
Basel IV: Standardising risk and capital calculations
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