by Stephanie Wolf, Head of Global Financial Institutions and Canada Transaction Services, Bank of America Merrill Lynch
Regulatory change is leading to a significant shift in the relationship between banks and their clients. While the changing environment is likely to result in higher costs for certain services and client groups, corporate and financial institution clients are placing more value than ever on the quality of their banking relationships.
It’s no secret that banks are moving into a more complex regulatory environment. The impact of regulatory change is becoming clearer, and banks’ customers are learning about these changes and how they are likely to impact banks and their clients. But with the cost of holding deposits and providing lending services likely to rise, corporate and financial institution customers are increasingly asking, “What does this mean for me?”.
When customers ask this question, they are typically asking about the impact on the availability or cost of their banking services – whether that means the interest rate paid on deposits or the fee that a bank charges for loan services.
The answer is “It depends”. For organisations such as investment managers, hedge funds and private equity companies, the impact of regulatory change on credit facilities and deposits is expected to be significant. For traditional corporate clients, on the other hand, it is likely to be business as usual. Meanwhile, banks and other non-bank financial institutions (NBFIs), such as insurance companies, will fall somewhere in the middle.