Brexit for Banks – Impact, and Progress of Preparations
With the UK’s decision to leave the EU, the Brexit scenario is one of the most recent incidents holding the banking industry in suspense. The separation of markets and clients as well as new regulations and uncertainty of legal status raise challenges for European banks. Although Brexit is expected to impact banks in German-speaking countries significantly, preparations are not on track.
Therefore, Horváth & Partners conducted a survey about the status quo at selected banks facing the challenges of Brexit. Executive and Senior Expert Level participants were questioned to examine their expectations regarding:
- Brexit-affected corporate areas
- the preparations needed, and
- the appropriate solutions
…for preparing their institution for Brexit.
The survey shows that banks seem reluctant to clearly address the required changes due to complexity and interdependencies with other projects:
- 70% of commercial/private banks and other financial institutions think they will be heavily affected by Brexit
- The majority of participants expect to see the biggest impact in governance & controls and clients
- Overall status of preparation for Brexit indicates moderate efforts across the various company dimensions
- Biggest challenge for 2/3 of banks is the complexity due to dependency on other projects and uncertainty of legal status
Despite regulatory uncertainty, Brexit requires immediate action in specific areas and a project portfolio strategy.