Welcome to the seventh edition of the Global Bank Review
Perhaps the most striking thing about the world of finance a decade and a half since the banking crisis is that the industry has not quite managed to regain the allure and self-confidence of earlier times, even though there have been successful years in between.
Indeed, gauging the mood in banking as we near the end of 2023, 'apprehensive' seems as good a description as any. Financial institutions have many reasons for feeling uneasy, among them subdued capital markets, a prolonged period of fractious geopolitics, the realities of serving more polarised societies, and the challenge of being in control rather than at the mercy of technology.
Certainly, this is a time in which trust – that most precious commodity in banking – is hard to earn and retain, whether due to conflicting consumer pressures, mounting demands of regulators, or the challenges of managing reputations exposed to the whims and lightning-fast reach of social media.
As we explore in this year's Global Bank Review: Trust Matters, trust will be stress-tested on many fronts, whether through combatting the escalating threat of online fraud, carving out credible positions on social and climate issues, creating new carbon offset markets which operate with integrity and transparency, or demonstrating resilience in the face of operational or market shocks.
Yet, institutions have rebuilt consumer confidence in recent years, demonstrably improving in a wide range of non-financial factors which would once not have featured so prominently on boardroom agendas. That reputation was further bolstered during the pandemic and its aftermath with banks doing their part to help keep businesses operating. While 2023 brought a handful of high-profile reversals, such as the collapse of Silicon Valley Bank and First Republic in the US and the emergency rescue of Credit Suisse by UBS in Europe, the wider system retained confidence without widespread disruption.
Not that there is much complacency. The reality facing banks is that they must operate in a less hospitable environment where a significant portion of their business and retail customer bases are feeling the pinch of a higher inflationary environment and transformation towards a digital operating model still requires massive investment in technology.
Such challenges are echoed in policy terms, where greater regional and political differences force banks to operate in a less harmonised world, requiring fleetness of foot in the deployment of their staff and human capital. Fragmented legal and regulatory regimes are not only less in tune but they are also more onerous for banks operating across borders, with the wave of new regulation confronting finance showing no sign of abating.
You will find all these issues and more explored in this edition, which draws on decades of legal and sector experience across our network. In this more complex and uncertain environment, perhaps banks must grow more comfortable in the spotlight, asserting their value to society, and embrace a more visible position as leaders in business. Can banks deliver both social change and shareholder returns, staking out positions which can withstand a high level of reputational and regulatory scrutiny? We hope this edition will help you thrive under the glare of the spotlight with confidence.