The problems began with the banks. So will the recovery. Although the American regulatory and banking landscape will be influenced by European systems, the fundamental commitment to innovation among even the biggest financial services institutions means that U.S. banks will move faster to implement the solutions that will support recovery within the first six months of the year.
This will be evidenced by banks investing in back- and middle-office systems to improve the understanding of their risks and their ability to report accurately, and to prove compliance to new regulations. Because they were likely distracted by bigger problems in the past quarter, banks may be caught off-guard in the transition from GAAP to International Finance Reporting Standards (IFRS) later in 2009. They will need out-of-the-box solutions that will help them quickly make the shift, otherwise they may be forced to adopt a technical framework or template approach that will allow them to make changes quickly, access the required data and internal and external systems, and deliver the required level of reporting. Those organizations able to offer templates for IFRS accounting will be in a strong position. The business process platform approach is ideally suited to address this challenge.
Larger institutions will be faced with the idea of "extending the legacy" and may experience little to no appetite for wholesale change. These banks will demand smaller-scale, more tactical solutions that offer fast ROI in a sub-12 month timeframe and can stick with existing core processing systems. Anything that can be extended, enhanced or made to be more transparent is a big plus.
Finally, public confidence in our financial services sector needs to be restored. This will require financial service organizations to become more transparent in terms of the risks that they take with their customers' money and where their money is being invested.