Have you noticed declining customer service from the world’s biggest cash management banks? Banks closing their books earlier at month or quarter end? It’s all do with the banks being overloaded by the new regulatory initiatives. 

Not enough resources
Although many banks have recruited heavily to cover the new requirements. Some still do not have enough resources to go round, so they have had to move customer services people onto projects that ensure that they can comply with the new regulatory standards. 

In time this will all settle down, and banks will eventually have the systems and people in place to cope with the new regulations. At the moment though, there is a growing number of stories of customer service issues, e.g. an Assistant Treasurer of a global company who uses several of the global banks said that, “The smoothness of service has deteriorated. Moreover, the lack of clarity in the interpretations of the regulations, has lead to some banks being much more cautious in their procedures. It is driving me mad.”

Basel III impact
Another issue is that banks are closing their books earlier as they calculate what they need to meet to Basel III liquidity ratios. Some banks seem to be closing their quarterly books early, while other banks are closing their monthly books early as well. Indeed, some companies have even had money returned as their bank has already closed their books. As more and more banks set up their liquidity management to comply with Basel III, this is bound to happen increasingly.

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Complying with the new regulatory frameworks is already not proving easy for both banks and corporates, and we haven’t even reached February 2014 - SEPA and EMIR deadlines!!