Amid the massive backlash from Wall Street against Dodd-Frank, some are urging banks to look at the silver lining.
Deloitte has a new report urging banks to use the new government regulations to their own advantage — and consider how some of the new rules could actually be a business opportunity.
Under Wall Street reform, for instance, the largest banks are required to undergo “stress testing” to see how they would perform under potential duress. Deloitte argues there’s a business upside as well, encouraging banks to do more than grin and bear it. “Stress testing can help banks review their balance sheets, see possible outcomes, and change course accordingly,” the firm writes. “Dodd-Frank is formally raising the bar on risk management, creating an opportune moment for banks to look at this as an investment rather than an expense.”
Deloitte believes a similar opportunity lies in the Consumer Financial Protection Bureau’s new consumer complaint database, another new reform that’s sparked an industry outcry. But, Deloitte asks, “What if banks approached the database not as a regulatory burden, but as a rich source of insights that could be used to improve the business?” The firm explains:
Identifying patterns within customer complaint data could help banks spot emerging problems before they disrupt the business, for instance, or improve the customer experience in more meaningful ways. Banks may see that a group of complaints in one area, such as a particular fee on a deposit account or a credit card, may also pose a similar concern in another area.
Deloitte doesn’t downplay the impact of the new rules, describing Dodd-Frank as imposing “a significant burden on banks…[which] has caused a lot of pain for banks in a short time.” But the firm asserts that Dodd-Frank is “here to stay,” so Wall Street should stop complaining and start taking advantage of a new business landscape.