Booking models in banking have traditionally been driven by a diverse set of factors–such as business priorities, legal and regulatory requirements, tax, and financial performance. When those models change, it usually happens incrementally over time in response to specific opportunities and business needs. It also usually happens without a holistic analysis that accounts for an integrated or big-picture view. But now, the regulatory environment and business strategy questions are driving rapid change.
Regulatory reform–both at home and abroad-is creating new and complex rules that are having a major impact on the way products are booked. As banking organizations comply with new regulatory requirements and supervisory expectations, they are overhauling business models and transforming how they operate. The need for transparency around booking models lies at the center of this change, since booking models determine how and where banking organizations transact. They also determine how the resulting risks are managed, both individually within a specific jurisdiction and together across multiple jurisdictions. Booking models are increasingly under scrutiny, and regulation and supervision are now key drivers of cross-border practices.