Regulation is at the top of many bank agendas these days, with multimillion dollar compliance projects now commonplace. But as Matthew Hodgson, CEO of Chatsworth client Mosaic, and Andy Webb, Automated Trader’s founder, explain, banks have yet to seize the opportunity to leverage this existing regulatory investment to generate profitability and competitive edge in FICC.
The scale of recent bank compliance investment is vast. In 2013, JPMorgan added 4,000 personnel to its compliance team and spent USD1bn on controls. In 2014, UBS spent USD1bn on meeting regulatory requirements, while more recently Citigroup reported that it was recycling USD2bn of USD3.4bn cost savings into compliance spending. Goldman Sachs has also been active, with more than half its new headcount of 2800 in 2015 being in compliance. But how can banks turn this investment into a profitable business opportunity? Data analytics holds the key.