Since the financial crash of 2008, commercial banking has undergone a monumental shift in regulatory reform to both manage and mitigate against operational risk. This transformation has been combined with an increased focus on improving enterprise-wide efficiency, profitability and shareholder value.
Established regulations such as Dodd-Frank, Sarbanes-Oxley (SOX), Basel II (superseded by Basel III) and the forthcoming rollout of MiFID II, seek to aggregate and improve how banks protect themselves against threats to governance, risk and compliance (GRC).
Data that is currently held is already being interrogated using machine learning, bots, virtual assistants and artificial intelligence (AI). This data has immense power to be harnessed for efficiency and this trend will continue to evolve in the years to come. A number of the world’s top commercial banks are investing significantly in this area and it is expected that those who continue on this automation journey will gain a technological competitive advantage.
Recent examples of this include JPMorgan’s program, called COIN (Contract Intelligence), which does the repetitive job of interpreting commercial-loan agreements – this process previously consumed 360,000 hours of lawyers’ time, annually. The software reviews documents in seconds, is less error-prone and never takes time off for holidays or rest – all making sound business sense and helping to reduce cost and increase profits.
CaixaBank is also maximising the use of IBM’s Watson to streamline processes. Pere Nebot, CIO, sees this investment as being valuable: “Connective computing is the new trend in commercial banking technology and in my opinion this will change interactions between customers and the bank and make life easier. Our connective architecture with Watson will allow us to work more smartly and give better service to our customers.” The output of AI systems like Watson, with the assistance of document automation software, has the ability to create and deliver a seamless process for the accurate generation of business-critical lending documents.
Many of the world’s top banks have grown exponentially over the past few decades – through global expansions, acquisitions and mergers – and processes that oversee governance have become somewhat uncoordinated and inefficient. This view is supported by a PwC report which states that, “While a number of banks have begun the commercial lending transformation process, some have not had the focus on data strategy that is needed to meet emerging regulatory reporting requirements cost efficiently… an inefficient commercial lending loan origination capability and related data environment will put a bank at a competitive disadvantage.”
Commercial banks are operating in a data-driven world, which in turn leaves data accuracy as an area of potential exposure and a weak link in the first line of defence in risk management. Automation of processes in data and documentation output offers a smooth route for companies to save money, increase accuracy and streamline processes, thus reducing risk. According to the British Banking Association: Operational risk in market-related activities can arise from many sources, such as poor or inefficient data management, systems and processes.”
The real value in “Big Data” lies in how to analyse and output specific customer data to get better outcomes. This acts as a keystone in risk management and has the power to change the “garbage in, garbage out” viewpoint to “quality in, quality out” with a standardised and clean output format.
In turn, this aids compliance with Basel II and SOX, in terms of execution and reducing data entry errors by having better delivery and business process management. It is of utmost importance that the validity of information and the quality of data is not compromised during processing and output – as the financial and reputational repercussions here are huge.
Some of the world’s most renowned banking leaders have echoed the view that innovation in software and new technology has the power to make commercial banking more proficient. Ralph Hamers, CEO at ING, states that: “if you are the first mover and to disrupt, you will lose some income on one side, but you will be able to grow more aggressively. The changes we have made have allowed us to process quicker responses to credit requests, which improves the service we give to customers.”
A number of challenger banks (such as the likes of Metro Bank and Aldermore) are continuing to disrupt the banking environment by gaining more market share, which is keeping larger companies on their toes and driving innovation and efficiencies across the banking sector.
Improving business processes with document automation has the power to propel even the largest and most established commercial banks into a position of strategic, competitive advantage. This focus on document quality as a cornerstone of GRC, particularly in such a data-rich industry, should help to offset at least some of the scrutiny of the past decade.
When discussing marketing, think of it as a contact sport. Marketing should be seen as a game for every attorney. Consider it to be a game in which you are seeking to obtain the most points of contact, meaning how many individuals can be seen per week, month and year. This game should also consider the individuals that are on your marketing team who are amenable to refer your business? Below are some of the many influential tactics that can be used in order to win this so called “game” of marketing.
Obtaining the correct targets
When playing a contact sport the correct material is necessary, you wouldn’t be playing soccer while using a basketball would you? When marketing you also need to find the correct targets. If you want to win this so called marketing game it is crucial for you to market the correct individuals. These individuals are those who want and need your services. Take the time in coordinating the ideal targets with your experience in order to meet the “points of contact.”
Formulating the right type of friends
Although the process of meeting other bankruptcy attorneys and legal specialists is important, it is crucial to become friends with the more dominant and the most influential players in the market you are in. For instance, if you are in the market that deals with construction companies that are seeking bankruptcy, then it is important to accompany the trade associations and attend their conferences. At these conferences is where the correct network connections will be made.
Become a scholar
Although you may not recognize it, there are many individuals that are interested in the knowledge that you have. It is important to take time aside in order to share this knowledge through a blog, articles and trade publications by sharing it throughout social media. There are many industry event coordinators that are seeking to obtain speakers and workshop leaders. When speaking or leading a workshop this puts you in the front of the room, which gives you all of the attention more than the average propaganda could ever do.
Build a list
There are times where the individual may be interested in your legal services, however may not be apt in purchasing. You can obtain these individuals through grabbing their attention by adding them to a mailing list in order to first get their approval. The mailing list that you create can administer a beneficial source of potential revenue and clients. However, it is crucial to keep the information that is given fresh with valuable information such as what is trending, events and news on bankruptcy.
You work throughout your life, invest and save wisely. You are enough careful of risks that threaten your savings and you would definitely like to pass work on to your dear ones after investing so much time, sacrifice and effort. However, you should be pretty careful about the least amount of government interference and tax while passing on your work. There are some well-established ways to make sure that the intended recipients get your financial legacy properly. Family limited partnerships, private foundations, wills, irrevocable trusts, revocable trusts and an alphabet soup of strategies are some of the indispensable parts in order to secure a financial plan.
Here is a list of some recommendations to minimize inheritance conflicts.
Address personal property separately
Make a separate list of your personal properties with proper instructions that who should inherit what item. The family members often start conflict among themselves regarding the inheritance of property. You can prepare a Personal Property Memorandum, i.e. a separate personal property list as a part of the will. You must put the date and signature while preparing a handwritten or typed list.
Update estate plan regularly
Make changes in estate planning as per changing circumstances, especially after a divorce. Under matrimonial laws, most of the states favour former spouses. You should immediately disinherit your former spouses, in order to avoid bizarre and unwanted results. Other changes in life like death or divorce of a child or incapacitation, illness or addiction of any beneficiary should also be considered while updating your estate plan.
Hold an open discussion on special assets
Family input is advisable in some situations. Conditions like the succession of a family business, care for a handicapped child, home require children and parents for continued enjoyment of a vacation should be listed on the same page.
Consider a prenuptial agreement
Inheritance conflict is mostly the reason for a second marriage. Conflict can be minimized at death with the help of a post-nuptial or prenuptial agreement. It clearly states the distribution of property among the spouses and other beneficiaries.
Clearly identify gifts and loans
Children with financial incapability are often helped by their parents. Parents generally offer help either as gifts or loans. Conflict can be generated due to the issue of unpaid loans from parents. Parents should clearly state about everything in their estate plan.
Property Fund Trust
In order to avoid conflict, you should properly retitle and fund all your assets. All the life insurance policies will name the trust as beneficiary if the will indicates equal distribution among testator’s children.
Estate planning is something no one really wants to deal with if only because you have to take on the subject of your mortality. Given the rather morose and unhealthy mindset we’ve developed regarding the end of life, it’s safe to say that most people try to avoid talking about death like, well, death. It isn’t an easy topic to bring up, and it certainly doesn’t get any easier when discussing how your belongings will be disseminated after your passing. What’s more, when it comes to your finances, the topic of estate planning is all the more difficult because it involves actually coming face to face with some serious numbers.
It’s too bad that so many people tend to face their final financial planning as a way of showing how little they’ve accomplished over their lifetime. People need to focus on the fact that they are making a plan the benefits their family after you are gone. They should be allowed to grieve, and proper estate planning accomplishes this task.
Here are five secrets (truth be told, it’s just common sense) to successful estate planning:
1. Draft A Will – Mocking up a simple version of your will doesn’t cost much and at least starts the process of where things may stand when you pass.
2. Name the Executor – As the title suggests, this is the person who will handle all aspects of your estate. You want someone you can trust, but you also want someone who you know will do a proper job.
3. A Living will – A living will scares a lot of people because it makes you face the possibility that you’ve either suffered a serious accident or are completely unable to communicate with those around you near the end of your life. Major court cases & drawn-out family dramas have come from a living will not being available & everyone scrambling to perhaps know what you might think would be possibly OK to do for you. It can get messy.
4. Update Your Will – Not only do you need to start the process of planning your estate, but you need to review the documentation at least once a year. Any changes that may come your way such as major life events (i.e., deaths, marriages, etc.) may change the contents of your will, so it pays to look it over regularly.
5. Communication – Before you pass & a final reading of your will takes place, and certainly before you are unable to communicate with your loved ones, you need to keep the lines of communication open so that you can tell everyone what plans you’re making. Yes, your will is the legal document of record, but should an issue arise regarding your intentions, you’ve at least been keeping everyone abreast to your wants.
Estate planning is not a fun time. Rather than approach the matter as a dreary “to-do”, though, think of it as just another note in your day planner. It is a rather defining moment in adulthood and one that everyone must understand is perhaps the most important thing they’ll do to help their family out when you’ve passed on. But it isn’t a way to signify an end to life; it’s more a symbol of you firmly having your sights set on the future.
Don’t let your personal estate planning fall through the cracks. Be sure to address this important documentation as soon as possible for sake of you & your loved ones’ peace of mind today.