So what do the emerging regulations imply for your customer?

The tightening of banking regulation is one of the biggest side effects of the last financial crisis. While central banks and other regulators are seeing to it that their subjects stick to the letter of the law, a breed of informed consumers is enforcing it in spirit, demanding integrity, transparency and accountability from financial service providers. In parallel, a slew of other guidelines – for example, those championing green banking and financial inclusion – which were once optional, are becoming mandatory. This is precipitating cultural, operational and process change across the banking organisation.

How do these regulations affect end consumers? For one, they de-risk the financial portfolio by ensuring that banks offer only transparent and sound products, especially to their retail customers. Fair and uniform pricing is also implicit. Second, they improve the overall safety of customers’ finances through deposit guarantees, prudent credit norms, KYC/AML clearances and the like. Third, the call for greater transparency and disclosure creates customer awareness, confidence and empowerment.

Financial inclusivity has a far reaching impact on the lives of those it brings into the banking fold. The poor and marginalised sections can now enjoy easy access to financial products, unthinkable even a few years ago. This is sparking a socio-economic revolution in villages by giving rise to a savings culture, fiscal responsibility, freedom from moneylenders and the empowerment of women.

With the global watch on climate control and environmental issues, the greening of banking is a given. Environmentally responsible practices benefit customers both directly and otherwise – for example, digital statements and remote global advisory services make life convenient, but a sustainable lending policy contributes to the overall well-being of the planet and its citizens. Ethical banking soothes the collective conscience by channelling funds into only those investments that respect human rights, environmental health and safety, social justice and animal welfare, for instance. A leading co-operative bank in the UK has gone so far as to let customers dictate its ethical policy. What could be greater proof of the impact of emerging regulations on consumer interest?