The Financial Services sector has really been through the ringer lately. While other sectors have certainly had their share of chaos and confusion, financial services actually has some new and significant legislation that needs to be sorted out.
Did the feds—or perhaps will the feds—go too far or not far enough is still a hot topic on Wall Street as well as K Street; but either way, the consulting profession finds itself, as it often does, right smack in the middle of trying to figure it all out.
We do our best to put it all in perspective—the challenges, the opportunities, the facts, the fallacies, the future—in this issue's cover story. Perhaps the eight pages and 4,000 words we devoted to the topic still won't suffice, but Eric Krell, our business writer, sure takes his best crack at making sense of a sector that was told to "engage in good-faith planning efforts" by regulators to be in full compliance with the Volcker rule by its 2014 deadline.
Think you could be a little more specific? A new regulatory environment is one thing, but a new regulatory environment without a whole lot of specifics is maddening. When you're trying to get through the regulatory red tape, it helps, of course, to know as much about what that tape is cordoning off; or perhaps holding together.
Those consultants who enjoy the challenge of decoding, debunking and demystifying new legislation are like kids in a candy store, and they have nearly 400 new Dodd-Frank
"flavors" to sample. Oh, and then there's that little matter of the brand new Consumer Financial Protection Bureau.
All of this means, of course, there's plenty of opportunity for those firms with the regulatory gravitas to do the heavy lifting for clients, but at what cost?
When a sector's main focus shifts from strategic to compliance, the nature of the work also changes. One of the more alarming insights, perhaps, comes from Booz & Company's 2012 Retail Banking Perspective: "It is our belief that a structural, secular shift is under way. The industry is transforming from a high-margin business to a lower-margin one."
And that's not good news for anybody.
Joseph Kornik
Publisher & Editor-in-Chief
jkornik@consultingmag.com
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