Adapting to New Banking Regulations Requires Agile Infrastructure

In the aftermath of the recent financial crisis, banks in some jurisdictions must deal with regulations such as the IFRS and the Dodd-Frank Act. Impending changes are inevitable for all. On Datawarehouse published an article on the importance of agile infrastructure for these reasons in, "Despite Basel III, Banks Must Prepare Their Data Infrastructure for More Changes in the Future."

Basel III will be implemented sometime between 2013 and 2019 and there is no certainty that this will be the last regulatory framework imposed on banking.

The article discusses how to implement Basel III effectively despite challenges:

Different divisions of the same organization may be making decisions that duplicate systems and efforts because they are oblivious of what the each is doing. To surmount these formidable challenges, Basel III must be implemented as part and parcel of line business processes as opposed to as a separate project. This is likely to reduce overall business disruption, enhance organization-wide visibility, hasten compliance, lower implementation costs and ultimately improve the risk and control environment in the bank.

It is clear that the banking industry must eliminate legacy systems, ring fenced processes and business units/divisions working in silos. Replacing these with an agile infrastructure will be key in the Basel upgrade and other situations where adaptability is necessary.

Megan Feil, July 23, 2012