Introduction

Bogie Ozdemir

We are living in an economic, regulatory and technological environment where financial institutions (FIs) need to up their game and find efficiencies. These efficiencies will come from capital utilisations, business-mix optimisations, technological innovations and adaptations, and operational and business process transformations. The period following the 2007–08 crisis has been challenging with constant regulatory changes, increasing capital and compliance requirements, economic weakness, and geopolitical power plays, wars and refugee crises. It is not getting any easier.

At the time of writing, we are moving into a new period of global uncertainty. The economy has never been taken off of life support since the financial crisis. Running out of monetary stimulus, low or negative interest rates have been (and still are being) used, which challenges the very fundamentals of the business models for both banks and insurance companies. Economic weakness has become the norm. European recovery is lagging, and European banks have not been able to re-capitalise to the same levels as the US banks. The US and Europe are likely to agree to disagree over Basel IV and go their separate ways.

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