Many U.S. banks are eliminating or reducing high-risk assets, including real estate and mortgage backed assets that require more capital in preparation for the new Basel III recommendations that phase into effect by 2019. This shift is generating pressure on pricing policies and procedures.
According to a recent study by Economic Intelligence Unit and IBM’s Institute for Business Value, 90% of the world’s top banks recognize the need for transformation in pricing processes, methodologies, and use of client data. Net interest margin is critical to financial services providers. They are experiencing competition for high quality loans, increased regulatory compliance expense, and recent legislation impacting fee income.