Private Banking: Building a Culture of Excellence

Chapter 4

Forces Shaping the Regulatory Environment

Regulatory developments cannot be thought of as something happening separately from the “real” world. They are very much a part of banking and one of the major factors affecting the industry. For private banking, there are two main issues likely to have the biggest impact in the foreseeable future: tax compliance and discussions about consumer protection.

Looking at the first of these, a transition to full tax compliance for all clients must be part of the strategy of any serious private bank. This marks a break with the mindset of the past. We are moving toward a new private banking paradigm.

Apart from the tax environment, consumer protection, driven by regulations, such as MiFID in Europe, are having a major impact as well. Consumer protection laws are aimed at increasing transparency and accountability. It is becoming extremely important to match the product to the profile of the client.

A further trend that is having a major influence on private banking is growing activity in mergers and acquisitions. This is being led in part by the need for consolidation to address rising costs. Understanding all of these aspects will be key in terms of positioning and defining the role of financial services organisations.

This chapter presents an overview of some of the major points and developments that are especially relevant in this regard for private banks from a Swiss perspective.

THE REGULATORY ENVIRONMENT

The regulatory environment ...