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Predicts 2010: Regulatory Compliance and Risk Management in Banking

by Kristin Moyer  |  January 4, 2010  |  2 Comments

Strategic Planning Assumption: By 2013, the cost of regulatory compliance and risk management will have “priced” Tier 3 and Tier 4 U.S. banks from the market.

David Furlonger notes a combination of forces leading to this situation (Gartner customers see “Predicts 2010:  Operational Technologies Present Threats and Opportunities in Banking and Investment Services”):

  • Regulatory compliance and risk management costs are rising.
  • Tier 1 and Tier 2 banks need to recapture and reinforce market share.
  • Tier 1 and Tier 2 banks have already built systems and expertise to accommodate a complex regulatory environment, and to absorb future legislative demands.
  • Tier 3 and Tier 4 banks lack robust systems, processes, knowledge and financial resources to meet those legislative demands.

The implications are that Tier 3 and Tier 4 banks will face pressure to merge with larger competitors due to their failure to make money and meet compliance needs.Customers will therefore face an increasingly limited choice of providers due to new legislatively defined markets. This will limit the number of providers by determining the number, variety and specificity of banking licenses, as well as the types of businesses and risk profiles that firms can adopt.

Category: operations  

Tags: regulatory-compliance  risk-management  

Kristin R. Moyer
Research Vice President
14 years at Gartner
more than 20 years IT industry

Kristin Moyer is a Research Vice President in Industry Advisory Services/Banking and Investment Services. She has more than 20 years of experience across the global high-technology industry in a variety of roles. Ms. Moyer's research coverage includes… Read Full Bio


Thoughts on Predicts 2010: Regulatory Compliance and Risk Management in Banking


  1. What are the criteria of the 4 banking tiers. Is it there exposure/risk/liquidity or simply their scale/size?

  2. Kristin Moyer says:

    Hi Andy, the focus is scale/size.



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