For financial institutions, this raises the question of whether they can continue to pursue current company strategies or the existing business model when taking into consideration the changes that have already occurred as well as those changes that are looming.

In the coming years, what must a business strategy look like that must, on the one hand, observe the regulatory guidelines and, on the other hand, not let costs get out of hand?

In our view, there are three possibilities:

• Fundamental changes to the business model, i.e. simplification of the distribution structure and the product offering as well as placing focus on certain markets and client groups that can be managed profitably.
• Point-by-point changes to the business model.
• Implementation of the regulatory guidelines while avoiding as much change to the existing business model as possible.

Significant factors for consideration in the decision making process:

• Costs (investments and recurring / ongoing costs).
• Flexibility and sustainability of the target business model with respect to regulatory and market-related changes (achieving cost savings through “synergies” of individual requirements).
• Stabilization of returns by means of new services (for example, tax reporting/forms for offshore clients).

More information: Road to Compliance – Efficient implementation of regulation leads to competitive advantages