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  • EY - Regulating from within - EY - Global
    Strategic Growth Markets How we help Entrepreneurship EY SGM Initial public offering Venture capital Family business services Transactions About Transaction Advisory Services Corporate Development Divestiture Advisory Services Lead Advisory Operational Transaction Services Restructuring Strategy Services Transaction Support Transaction Tax Valuation Business Modelling Specialty Services Climate Change and Sustainability Services CertifyPoint China Overseas Investment Network Family Business Services French Business Network Global Business Network Japan Business Services Careers Students The EY difference Your role here Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Industries Financial Services Banking Capital Markets EY Regulating from within Share From cyber threats to disruptive innovation structural reforms to stress testing banks are facing an array of challenges Will integrating regulatory requirements into strategy instead of merely reacting help banks thrive For the fifth year running EY has collaborated with the Financial Times to sponsor their edition of The Banker Supplement launching at The World Economic Forum in Davos This special edition supplement explores the trends that will impact banks strategies and drive a safer and sustainable future Three lines of defense rebuilt for cyber threat The threat of cyber attack sits outside of traditional risk governance standards Structural reforms past their use by date Will structural reforms be made obsolete by more general changes to the global banking market Misconduct debate moves beyond regulation Banking needs an open and innovative environment where good conduct and good performance co exist Banks adjust to stress testing as supervisory tool Stress testing has become a means to push banks to enhance their risk and data governance Reinventing bits of the bank Fintech start ups are adept at pulling apart the banking business neatly picking off low

    Original URL path: http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/EY-regulating-from-within (2016-02-10)
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  • EY - Transforming talent - The banker of the future - EY - Global
    Network Family Business Services French Business Network Global Business Network Japan Business Services Careers Students The EY difference Your role here Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Industries Financial Services Banking Capital Markets Transforming talent The banker of the future Transforming talent The banker of the future Global banking outlook 2016 Share The banker of the future null Ribbon 20 20Facebook blank link Middle Content title Facebook The banker of the future source ey com null Ribbon 20 20LinkedIn blank link Middle Content title Linkedin The banker of the future null Ribbon 20 20StumbleUpon blank link Middle Content title Stumbleupon The banker of the future via EYNews null Ribbon 20 20Twitter blank link Middle Content title Twitter Build a future of bright banking talent Digital disruption will make tomorrow s banking workforce unrecognizable from today s Banks must build a culture that nurtures diversity of thought and ensure bankers have the new skills they need to succeed If banks are to rebuild a viable industry transforming their people is as important as transforming their products and processes Global Banking Outlook 2016 Transforming talent The banker of the future explores how the human resources life cycle must be overhauled to build a bright future of talented bankers Take the four steps to a bright future of talented bankers Four specific actions can help banks ensure their employees have the aptitude to deliver success in tomorrow s world Assess technology s dramatic disruption of the banking workforce Understand the expectations of a new generation of bankers Change culture to encourage diversity of thought Nurture and empower a collaborative workforce As technology revolutionizes the banking workforce eliminating changing and creating roles across the business banks must evolve as rapidly as technology itself At the same time a new generation of employees is bringing new expectations By 2025 millennials will make up 72 of the global workforce their aspirations and attitudes will shape the workplaces of the future If banks are to prosper they must retain leading talent and encourage a culture of intrapreneurism by nurturing diversity of thought A stronger better banking world won t be made up of the best individuals but the best combination of diverse individuals Banks can maximize performance and productivity by transforming the ways they recruit progress employees through their careers and foster collaboration between employees with different skill sets In the future HR functions will not support resource management but mobilize intelligence In delivering this change bank leaders must recognize that although success may not be achieved swiftly re engineering the workforce is potentially more important than next quarter s earnings and an important aspect of his or her legacy Are you that leader Transforming talent The banker of the future New generation new expectations The banker of the future Millennials will make up 72 of the global workforce by 2025 their

    Original URL path: http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/ey-transforming-talent-the-banker-of-the-future (2016-02-10)
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  • EY - Rethinking risk management - EY - Global
    office as a cause of risk culture deviating from board expectations Five steps to increased front office accountability Streamlined governance structures and new committees processes and policies that ensure that the front office is truly accountable for all risk Greater capacity for the front office to assess risk itself a shift from the three lines of defense approach that calls for the independence of the risk function More effective communication of cultural values supported by performance management compensation and training Clarification of the range and magnitude of acceptable risk using an embedded risk appetite statement Alignment of incentives with risk objectives and enforceable disciplinary action for breaches in rules and misbehavior Enforcing front office accountability is a critical step toward transforming a bank s risk culture along with successfully embedding risk appetite Embed risk appetite into business decisions Banks continue to struggle to embed risk appetite the amount and type of risk an organization is willing to accept into business decisions Despite the fact that risk appetite has been a top area of focus for boards and chief risk officers for the last several years only 43 of banks report they have successfully integrated risk appetite however progress is being made 53 report strong progress in their ability to track and enforce it Risk appetite is seen as an essential element to risk accountability within the business lines The majority 70 of executives surveyed agree that successfully executing business wide risk appetite must be a collaborative top down bottom up approach involving the board CEO chief risk officer and chief financial officer in discussion with business leaders Banks are developing clear metrics to provide a common financial risk language and moving toward using some form of forward extreme loss as a core metric e g 57 are using stress test metrics and 32 are using loss in extreme events metrics Measuring risk in banking 74 use a tailored approach for different risk types within the operational risk framework Only 47 use an allocation of operational risk loss to business lines 83 have started to create a risk appetite for non financial risks including conduct and compliance The rethinking of non financial risk in how risk appetite is embedded across the business will have long term and lasting impact on a bank s overall transformation of its risk culture Strengthen risk culture with clearer penalties for bad behavior High profile conduct failings have increased board and management attention to culture Globally 75 of firms are in the process of changing culture up from 66 last year But the transformation is a work in progress according to 81 of banks Just 42 of banks believe employees understand that bad behavior will be penalized despite earnings performance and only 44 say that individual behavior is significantly reflected in career progression Banks are taking misbehavior seriously Ninety four percent of banks report that severe breaches of their risk policies result in disciplinary actions So what is responsible for a breakdown in risk culture Almost

    Original URL path: http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/EY-rethinking-risk-management (2016-02-10)
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  • EY - Transforming investment banks - EY - Global
    Family Business Services French Business Network Global Business Network Japan Business Services Careers Students The EY difference Your role here Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Industries Financial Services Banking Capital Markets Transforming investment banks Transforming investment banks Looking for acceptable sustainable ROE Share Major investment banks can transform to provide investors with acceptable sustainable returns on equity ROE but doing so won t be easy The days of pre crisis 20 plus ROE are long gone and many banks are now pursuing target returns barely above their costs of equity We believe that with an unremitting focus on transforming existing business and operating models banks should be able to achieve sustainable returns of 12 15 Investment banking is an industry in turmoil Protect and survive solutions are failing Against the triple pressures of declining profitability structurally higher costs and greater competition current approaches to weathering the new and challenging business climate have proven to be damage control at best Over the last three years only one investment bank has managed to achieve an average cost to income ratio below 60 and annual profit per employee in excess of US 300 000 Powerful oversight from control functions has not been enough to manage front office culture Traditional operating models of vertical asset classes and horizontal functional support lines are losing relevance Shifting from capital intensive activities to fee based business lines has made little change Reducing asset costs and lightening balance sheets have not gone far enough Achieving 15 ROE through cost reduction and revenue growth alone is virtually impossible Banks would need to reduce their costs by around 34 without a rise in revenue boost revenue by around 24 without a reduction in costs or simultaneously cut costs by around 15 and grow revenue by around 10 Rebuild ROE If investment banks are to achieve double digit returns and thrive they must do more than react to current pressures They must invest in a long term strategy with an unremitting focus on four critical pillars of change Optimize both assets and operations by better utilizing balance sheets and radically reducing costs Banks must review and re engineer key processes including existing sourcing by assessing the role of utilities and undertaking a vendor assessment and supply chain review Transform culture by providing incentives for the behaviors that will deliver value for shareholders and clients while meeting regulatory expectations That means reassessing compensation setting the tone from the top establishing clear accountability identifying behavior drivers rewarding good behaviors reforming hiring practices and enhancing the non financial employee proposition Become client centric by moving away from product centric approaches and putting the client at the heart of business and operating models Banks must undertake profitability analyses to identify core clients and their needs deploy client satisfaction systems and enhance the client experience through single shop fronts and

    Original URL path: http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/EY-transforming-investment-banks (2016-02-10)
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  • Global consumer banking survey 2014: Winning through customer experience - EY - Global
    Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Industries Financial Services Banking Capital Markets Winning through customer experience Global Consumer Banking Survey 2014 Winning through customer experience Inside Winning through customer experience Know your 8 customer segments Three opportunities for banks Why banks must act now Explore segment and country data in four areas Trust and confidence Banking behavior Customer experience Demographics Share Our third Global Consumer Banking Survey looks at banking through the lens of the customer How do customers perceive their banks What services do they expect their banks to provide How well do their banks deliver on promises These questions are at the core of this year s survey which includes responses from more than 32 000 retail banking customers across 43 countries The survey data reveals eight unique types of consumers each with its own set of values attitudes and needs This segmentation of the survey audience underscores that customer experience is the key to winning growing and retaining customers in an increasingly competitive banking environment Customer experience is the key In many ways consumer banking is like other types of consumer activity But banking customers expect more than an excellent mix of products they are looking for superior customer experiences that fulfill basic expectations while providing added value In our survey customers selected the way I am treated as the second most important reason for trusting their banking provider trailing only the predictable financial stability of their bank Customer experience is also the most common reason for opening and closing accounts more so than fees rates locations and convenience This idea of trust is what transforms customers from static sources of revenue into advocates for their banks In an era where social and digital media enable consumers to immediately share their experiences customers who trust their bank will drive the most referrals and be more willing to consolidate their banking needs with a single financial services provider This makes them the growth engines of any bank Creating customized banking Each of the eight customer segments shares common behaviors and expectations when it comes to their banking experience By focusing on the type of customer rather than the number of customers banks can build a reputation for excellent customer service Although crafting common strategies can be more efficient banks that approach each customer the same way risk offering individual customers the wrong products services and advice across less effective channels To optimize investments in customer experience banks should deploy segment based strategies that take advantage of these inherent similarities but also their differences Competition from all sides The good news is that consumer confidence in the banking industry is on the rise with 93 of survey respondents reporting moderate or complete trust in their banks Likewise 77 of customers are satisfied enough with their banking relationship to recommend their primary provider The global

    Original URL path: http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/Global-consumer-banking-survey-2014 (2016-02-10)
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  • EY - Global Commercial Banking Survey 2014 - EY - Global
    and innovate to raise their market penetration and share of wallet in spite of flat markets With rising costs including the burden of regulatory compliance it is more important than ever to focus on strengthening customer relationships to find new sources of growth and protect against increasing competition from banks and non traditional entrants Our survey reveals ways to better serve bank customers with a continued investment in digital technology Highlights include Mid market customers are heavy users of digital channels 3 distinct customer segments We identified three distinct global customer segments based on strategic growth priorities product usage digital adoption and potential returns to the banks Increasingly Internationals Companies with cross border ambitions high digital adoption and an increasing need for a wide range of banking products and service Traditionalists Smaller primarily domestic companies that tend to use fewer products and are slower to adopt new banking channels Diverse and Dynamics Companies with wide ranging strategic goals when examined through the lens of technical savvy their common priorities and drivers for bank selection and channel preferences become more apparent Eight in 10 commercial customers are using online banking each week and almost seven in 10 are using mobile banking weekly Digital leaders must be able to not only deliver new features and functionality but just as importantly demonstrate a sustained commitment to ensuring customers security Our survey shows that customers want Enhanced security 59 of respondents Transaction tracking 44 Electronic signature and submission 40 Instant message support 39 Video support 26 Security is the 1 barrier to adoption When asked about reasons for not using online and mobile channels more often the most commonly cited concern was security Banks that succeed in reassuring customers about the safety of their platforms will remove a primary impediment to further digital growth The top concerns cited include Security 49 of respondents Slow speed 31 Poor functionality 26 Difficult to use 22 Commercial banks must fend off new competitors Our results show that 53 of customers are already using non banks and 38 would consider doing so In addition to the more established alternatives to banks such as credit card and insurance companies new entrants are contributing to altering patterns in bank loyalty and switching service providers Banks must continue to fend off these diverse competitors which are seeking to win portions of commercial customers banking business Banks must be proactive about error resolution Nearly one third of all customers experienced an error in the last two years and 57 were less than highly satisfied with the resolution Better performance in this area could help to reduce customer attrition rates Overall companies in the Americas tend to have higher satisfaction levels and companies in developed Asia Pacific regions are less often highly satisfied with their banks responses First impressions count Once a bank has convinced a customer to switch providers it needs to make sure that the customer s first experience is positive Unfortunately this is often not the case Almost half of

    Original URL path: http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/EY-global-commercial-banking-survey-2014 (2016-02-10)
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  • EY Delivering sustainable returns - redesigning the front office - EY - Global
    traditional competitors and newly emerged non banks such as technology and telecommunications providers We have identified four elements for a successful front office redesign and stress the need to implement these reforms with proper governance and incentives that encourage their adoption Understanding SMEs In this whitepaper we define the SME segment as companies with annual revenues of US 1 million to US 50 million This segment accounts for more than half of all private sector jobs and GDP worldwide The complexity of SME customer needs varies but most tend to use few providers and want banks to act as a holistic advisor rather than a traditional product pusher This makes service quality critical for retention The number of providers vying for a chance to serve SME customers is increasing They include innovative technology firms telecommunications providers alternative asset managers insurance companies and other banks If banks are to capture the profitable income streams that the SME segment presents they need to act quickly to maximize efficiency and address these threats In addition banks need to manage increasing compliance costs and bottom line pressures without losing sight of customer satisfaction 1 Redefine segmentation Segmentation must go beyond the traditional and often sole focus on revenue which is a metric that fails to put market and customer characteristics into context Data and portfolio analytics are crucial tools in this phase Advanced analytic techniques such as propensity modeling help predict future customer needs by leveraging data from all contact channels Our analysis shows that approximately 35 of customers generate a net loss for their bank Given that costs are typically spread evenly across the total customer base new segmentation strategies can add significant value 2 Revamp service models This new segmentation strategy and better understanding of customer tranches will help banks develop more appropriate service models Our experience suggests banks should consider the following three models Retail plus This model targets the lower value customer tranche identified in the new segmentation model It includes branch digital and self service channels but excludes access to a relationship manager The model shifts day to day interactions to self service and other lower cost channels such as kiosks call centers and chat rooms The model stresses a simple seamless experience across channels allowing customers to begin a transaction in one channel and easily finish it in another SME core This model focuses on the middle tranche of customers who have more sophisticated needs use more bank products and have higher cross sell potential It adds access to a pool of relationship managers in addition to the branch as well as digital and self service channels For this segment we recommend using junior relationship managers aligned with a credit manager and risk officer This approach institutes the concept of a deal team which allows junior staff to handle non advisory products and learn from senior managers SME premium The upper end of the SME segment is relationship driven and these high value customers should have a named

    Original URL path: http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/EY-delivering-sustainable-returns-redesigning-the-front-office (2016-02-10)
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  • Banking in emerging markets 2014 - Investing for success - EY - Global
    Investment Network Family Business Services French Business Network Global Business Network Japan Business Services Careers Students The EY difference Your role here Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Industries Financial Services Banking Capital Markets Banking in emerging markets Banking in emerging markets Investing for success Share Driven by an expanding middle class rapid growth markets RGMs are the new engines of growth in global banking Our report Banking in Emerging Markets Investing for success explores 11 RGMs see box below rising alongside the BRICs and growing at twice the rate of developed markets The potential is immense 88 of survey respondents are optimistic about their banks financial performance and expect the outlook to improve for most business lines Across the 11 RGMs we estimate that bank credit to the private sector will grow by over 1 5tn between 2013 and 2018 If banks are to take advantage of the opportunities these markets offer they must understand their specific challenges and make investments in three key areas Use our interactive tool to explore how banking respondents across the RGMs answered questions about expectations challenges and opportunities Understanding the challenges Defining the RGMs Our report identifies three stages of maturity across 11 rapid growth markets Frontier RGMs Kenya Nigeria Vietnam Have per capita GDP below US 2 000 the point at which deposit and savings products typically appear and nascent capital markets with a capital market depth under 50 of GDP Transitional markets Colombia Egypt Indonesia Typically at least 30 of the population has bank accounts and capital markets are further developed Established RGMs Chile Malaysia Mexico South Africa Turkey Have per capita GDP above US 8 000 the point at which credit products become established and capital market depth of over 125 of GDP Strong growth remains the underlying trend in these RGMs However certain headwinds are strengthening as markets matures and almost three quarters of respondents expect the industry will struggle to maintain current returns on equity in the next year Banks face three main challenges Tougher regulation Regulation is now a key battleground between global and domestic banks 79 of bankers expect an increase in regulation in their country over the next year Intensifying competition More than 75 of bankers see price competition on business loans retail loans and deposits as a challenge As political and trading blocs drive pan continental banking local banks will struggle against global and regional players as their clients expand into new markets Increasing costs Wage inflation increased competition for talent and regulation compliance are placing significant cost pressures on banks in RGMs Key investments Banks are already responding to these challenges by strengthening risk management improving capital and business efficiency and focusing on winning profitable customers However success will be hard to achieve without significant investment by banks in three key areas Technology to Improve efficiency of internal

    Original URL path: http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/Banking-in-emerging-markets-2014---Key-findings (2016-02-10)
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