Banks that take a wait and see approach to Basel IV are likely to face higher costs and added travails in implementation, as well as fewer commercial benefits in the years ahead. That’s according to a new white paper from Wolters Kluwer’s Finance, Risk & Reporting (FRR) business that reveals how banks can adopt a path to greater productivity and profitability, becoming a “better bank,” not just a more compliant one.
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“Basel IV – Your Path to a More Profitable Business”
The white paper, “Basel IV – Your Path to a More Profitable Business,” notes how the deadlines for implementing the latest round of Basel guidelines have been delayed to help institutions cope with the personal and commercial toll of the COVID-19 pandemic. As immense as the toll is likely to be, and as urgent as resolving issues related to the pandemic are, banks should not lose sight of the importance of preparing for Basel IV and the many difficulties it will create along the way. New or revamped technology will be required. New or revamped thinking and organizational structures will be required, too, and, as the white paper discusses, not just during the implementation phase, but long after.
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The message encapsulated in the phrase “Basel IV for business” has been articulated for years by Wolters Kluwer as financial supervision has evolved through IFRS 9/CECL and earlier Basel Committee guidance. The continued emphasis on forward looking analysis and a holistic, collaborative organizational structure for compliance and reporting purposes, supported by data management capabilities designed along the same lines, can be leveraged for strategic planning and other commercial objectives.
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