BCBS239 – One of the missed opportunities?

Since more than ten years already regulators are the most creative inventors and innovators for the banks. A consequence was that FinTechs came up and OpenBanking was initiated. But why is this the reality??

Let me discuss this based on my often used example.?

What is BCBS239?

BCBS239 or headlined by?“Principles for effective risk data aggregation and risk reporting” was initiated in order to provide a traceability about the information, which lead to?or influence?a specific risk.?

Or say it in another word: What type of product given to a specific client generated what risk for the bank.?

What happened??

When this regulation came in place, it was focusing clear on risk management. So, the subject was given as a hot potato to the risk area responsible within the banks, so either CFO or CRO departments.?

The consequence was, that the implementation was implemented mainly with a risk point of view.?

What did not happen??

But, when you already have to implement a traceability regarding risks, why not use the same information for revenue. This chance was not taken, but the implementation mainly done for the risk area. So, this regulation would have given the ability to even increase the potential revenue with a client.

And?

My key learning of this and others is that the typical management in the banks was and is just looking on the regulator and are not creative enough to think what and how you can enable regulation to increase or steer your potential revenues.?

Happy to discuss my thoughts.

#lhotsesummitbook