Recent regulatory acts, coupled with continued changes in consumer behavior, are positioned to slice deeply into the profitability of U.S. banks-furthering the need to look for new profit streams. This places new emphasis on the age-old issue of cross-selling at banks in order to earn a larger share of consumers' wallets.
Nearly 90% of banking industry leaders noted over-regulation as the "biggest threat to their growth prospects," according to a new PricewaterhouseCoopers (PwC) survey. Dodd-Frank alone is set to restrict fees and increase compliance costs, potentially cutting profits by 12% over the next five years, says PwC. The CARD Act could also decrease the amount that financial institutions collect from interest and fees, further reducing income for large banks by $500 million to $1 billion, or for mid-tier banks, some $50 million to $100 million, notes PwC. "Some of the regulatory changes are impacting the profitability of banks," says Dave Hoffman, a partner with PwC and co-leader in the U.S. for the banking operations and technology group. "And that pressures banks on how they price and market their products."
Register or login for access to this item and much more
All Bank Investment Consultant content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access