Regulatory oversight has intensified over the past few years forfinancial institutions around the world, and it's starting to havean impact on these institutions' business.

The Basel III framework will require banks to maintain a Tier 1capital reserve equivalent to 7 percent of the value of theirrisk-weighted assets, and to maintain liquid assets equivalent to30 days' worth of cash outflows. Solvency II places new capitalrequirements on insurance providers. In the United States, theDodd-Frank Act requires periodic stress testing for many financialservices providers, as well as placing tight restrictions onderivatives trading. At the same time, the European MarketInfrastructure Regulation (EMIR) and Markets in FinancialInstruments Directive (MiFID) are changing the regulatory landscapefor European financial markets.

As lawmakers and regulators continue to sort out the details ofthese and other rules, many banks have begun reconsidering theirrisk management and compliance processes. The actions they take mayresult in changes to the pricing of their products and/or services,as well as changes to the portfolio of products/services they offercustomers.