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The global tax landscape and the banking and capital markets industry are both in a state of rapid and constant change primarily as a result of a more global and technologically advanced world. These changes directly impact the function and expectation of a tax department. Are your clients' businesses equipped to handle the challenges of 2020? If not, do their tax department know what it needs to do in order to optimise its function in 2020?

Consumer banking is on the verge of disruption, much of which is led by the disaggregation of simple products and service offerings.

European banks need to drastically transform their business models to become sustainably profitable and earn their costs of equity. This report raises serious questions about the sustainability of current banking business models and offers three innovative strategic options for what traditional banks could become: platform banks, digital banks, or OEM banks - streamlined banks that emulate original equipment manufacturers.

Central banks are scanning a new and uncertain landscape. Many commentators believe that the era of one policy objective - inflation targeting - and one tool - interest rates - is over. And their operational independence, which took such work to cement during the "Great Moderation" that preceded the financial crisis, has been severely questioned by the nature of the crisis interventions. So where do central banks go from here?

Banking and Capital Markets (BCM) organisations are facing the immediate challenges of economic and political uncertainty and the longer term impact of new technology, more exacting regulation and shifting customer expectations.

One year and one month after the official launch of the new Single Supervisory Mechanism (SSM), the Banking Union is in the process of moving forward.

For more information on this topic, please contact Philippe Sergiel, Partner, Emmanuelle Henniaux, Partner, or Jean-Philippe Maes, Partner.

On 21 December 2015 the European Banking Authority ('EBA') published its final guidelines on sound remuneration policies (the 'Guidelines'). These Guidelines are the finalized version of a draft originally published for consultation in 4 March 2015.

The Centre for the Study of Financial Innovation is a non-profit think-tank, established in 1993 to look at future developments in the international financial field - particularly from the point of view of practitioners. Its goals include identifying new areas of business, flagging areas of danger and provoking a debate about key financial issues. The Centre has no ideological brief, beyond a belief in open markets.

Market liquidity is critical to effective market functioning. Liquidity in financial markets facilitates the efficient allocation of economic resources through the productive allocation of capital and risk, the accurate generation and dissemination of issuer-specific information, and the effectiveness of monetary policy and financial stability.

Capital Markets 2020

The world of 2020 will be more complex for the users of capital markets. More fragmented providers, fewer products, less customisation and higher cost of services will be the order of the day. Successfully managing risk, liquidity, funding and investment returns in this world will require greater focus, attention and creativity than before.

Financial institutions are under pressure from business-unit leaders, investors, boards of directors and their regulators to deliver improved and more transparent performance management data. Many of these pressures are driven by regulatory changes that emerged after the most recent financial crisis. Financial institutions were accustomed to managing their businesses with summarised financial information, based largely upon generally accepted accounting principles.

In the foreword to our 2012 report Banking industry reform – A new equilibrium1, we made a prediction about the global financial crisis. We said that the financial sector would emerge from the crisis to a world very different from the one we remember going in, partly as a result of the crisis itself, and partly due to other global trends and developments that have been gathering pace alongside it. These included changes in global economic growth patterns, advances in technology, a new competitive landscape, and also – crucially – changes in stakeholder attitudes and expectations.

Affordable access to credit has always been challenging for small and medium-sized enterprises (SMEs) in Europe, but the problem is probably more acute than at any time in recent history. This reflects a mismatch between the demand and supply of credit that is likely to continue for several years. In the long term, improvement in banks’ capital levels and adjustments in SMEs’ expectations might lead to the emergence of a smoother functioning SME lending market. But over the next few years many small and medium-sized firms are likely to find the terms of bank credit, already demanding, virtually unaffordable.

As part of our ongoing series of research illuminating the future of banking around the world, PwC developed Retail Banking 2020, which takes an in-depth look into how the banking landscape will change between now and the dawn of the next decade. Through our proprietary research and insights derived from numerous client conversations, we identified six priorities that banks should embrace for success in 2020.

Passing the stress test – PwC Survey on regulatory stress testing in banks

Regulatory stress testing is moving to the forefront of an ongoing public debate about how banks restore trust and improve their financial health. Banking supervisors around the world are using stress testing as a primary tool in spotting emerging risks and setting what they believe to be adequate bank capital levels. This poses a major challenge for banks, many of whom appear to derive false comfort from their existing capabilities.

Retail banking will look very different in 2020 than it does today. Many have gloomily predicted the fall of the traditional bank, as disruptive new entrants win share by offering a better customer experience through new products and channels. Yet, despite the emergence of new competitors and models, we believe the traditional bank has a bright future - the fundamental concept of a trusted institution acting as a store of value, a source of finance, and as a facilitator of transactions is not about to change. However, much of the landscape will change significantly, in response to the evolving forces of customer expectations, regulatory requirements, technology, demographics, new competitors, and shifting economics.

Banking & Capital Markets CEOs are more upbeat about the prospects for the global economy and recognise the impact of a rapidly changing competitive landscape. But less than 40% have initiated plans to respond to the changing competitive landscape in the key areas of distribution, data analytics and innovation capacity.