PwC: Smarter implementation of regulatory change could save banks 24% of costs
5/3/2013 17:49
New research from PwC has found that if banks adopted a smarter approach to their regulatory reform programmes, they could save 24% of the costs of their implementation programmes.
Banks face a number of challenges as the unprecedented wave of regulatory demands is continuing to gather force. Looking ahead, conditions are expected to remain challenging over a long period. Consideration of the continuous stream of regulatory announcements, consultation papers and reviews highlights the fact that this is set to get even more complex over the next few years.
More agile, proactive and coordinated planning and execution will allow banks to:
• Improve on poor delivery quality. The vast majority of organisations not employing portfolio management reported that less than 10% of projects met the key performance indicators. This phenomenon was even starker for more complex portfolios.
• Reduce financial costs associated with programme overrun. The average project overrun is 24% of budget and schedule, although this number increases by a factor of ten in many of the larger, more complex projects facing ‘black swan’ risk events.
Stelios Constantinou, Partner in charge of the banking industry at PwC Cyprus said:
“Banks have always faced regulatory-driven change. What sets the current environment apart is the sheer volume of significant new regulation being introduced. Factors complicating the volume of work to be done include tight timelines, the degree of uncertainty around interpretation and inconsistency between regulators – all of which aggravate the delivery risk. Plus, the regulations require banks to fundamentally address the way they do business and so command a significant part of their annual change budgets.
“Unrelenting regulatory change will remain with us for the foreseeable future so a new approach to managing the resulting change is critical. A more agile, proactive and coordinated approach to implementation can ensure that waste is reduced, resources are used more efficiently and regulatory schedules are met.”
Banks face a number of challenges as the unprecedented wave of regulatory demands is continuing to gather force. Looking ahead, conditions are expected to remain challenging over a long period. Consideration of the continuous stream of regulatory announcements, consultation papers and reviews highlights the fact that this is set to get even more complex over the next few years.
More agile, proactive and coordinated planning and execution will allow banks to:
• Improve on poor delivery quality. The vast majority of organisations not employing portfolio management reported that less than 10% of projects met the key performance indicators. This phenomenon was even starker for more complex portfolios.
• Reduce financial costs associated with programme overrun. The average project overrun is 24% of budget and schedule, although this number increases by a factor of ten in many of the larger, more complex projects facing ‘black swan’ risk events.
Stelios Constantinou, Partner in charge of the banking industry at PwC Cyprus said:
“Banks have always faced regulatory-driven change. What sets the current environment apart is the sheer volume of significant new regulation being introduced. Factors complicating the volume of work to be done include tight timelines, the degree of uncertainty around interpretation and inconsistency between regulators – all of which aggravate the delivery risk. Plus, the regulations require banks to fundamentally address the way they do business and so command a significant part of their annual change budgets.
“Unrelenting regulatory change will remain with us for the foreseeable future so a new approach to managing the resulting change is critical. A more agile, proactive and coordinated approach to implementation can ensure that waste is reduced, resources are used more efficiently and regulatory schedules are met.”
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