If there’s an upside to the downturn, it’s the inevitable rise in new government regulations designed to prevent the next big economic collapse. Regulations have historically led to profitable consulting opportunities, and the coming wave of new requirements hanging over financial services companies appears to fit that bill. To learn more, Consulting’s One-on-One sat down with Carol Beaumier, the leader of Protiviti’s global financial services and regulatory risk consulting practices.
Consulting: Over the next few years, what are the biggest regulatory opportunities? And how is Protiviti preparing?
Beaumier: We’ve recently put a taskforce together to better prepare for the client demands regarding Dodd-Frank and Basel III. The new regulatory requirements will impact multiple jurisdictions and require a broad perspective. We’re pulling resources from our US, Europe and Asia-Pac financial services practices, as well as from risk and compliance. We’re thinking that the reengineering work will require both business and technology expertise.
Consulting: What’s the biggest challenge regarding the new regulations?
Beaumier: At this point, the challenge is that there are so many moving pieces. The Dodd-Frank law will likely require as many as 350 different regulations, each of which has to be promulgated and implemented. Moreover, the new Consumer Protection Bureau will have responsibility for supervising companies that have not been supervised in the past.
Consulting: With so many new potential requirements, where are clients asking you to start?
Beaumier: We’re already seeing regulators stressing the need for better risk management. So, some of the initial work is with asset companies, looking to stay in compliance with Dodd-Frank.
Consulting: Looking ahead to promulgation of Basel III, what opportunities do you anticipate will emerge?
Beaumier: Clearly, the yet-to-be-finalized Basel III rules will require more capital planning and may determine how certain businesses are structured. Our clients will have to make changes to accommodate the new capital requirements. Implementation is still at least three years out, so there’s not much business yet.
Consulting: What’s the timetable for Frank-Dodd requirements?
Beaumier: Regulators are already highlighting some of the issues that will be addressed, prior to the final rule making. Depending upon which regulation we’re talking about, it could be 12 to 18 to even 24 months before all of the rules are out there. The financial services industry is moving in the direction where they think rules might go, but are trying not to get too far ahead of the curve.