The G20 leaders’ financial reform and its impact on EU banks’ back-office function

The 2008 financial crisis and the financial reform, which was implemented in response to this financial crisis by the G20 Leaders, have significantly changed the environment in which the banks’ back offices must operate and the requirements which they must fulfil. They must continue to increase regularly and incrementally the efficiency of their processes and procedures. However, they must now also play a major role in the implementation of the financial reform and fulfil new comprehensive and complex regulatory requirements that are being developed since the end of the previous decade. In this new environment, a merely incremental strategy has become insufficient. Instead, this article considers that banks’ back offices have to follow a holistic and in depth strategy, and use a broad set of tools for change. The implementation by the back offices of the new requirements has to be approached as an opportunity for a fully fledged review of processes and procedures, considering the new requirements as both legal obligations and also opportunities to review business models and support the overall strategy of the banks. The following three strategic operational objectives should be sought: enhance operational processes, increase efficiency of collateral and cash management and improve data quality.