The quality and breadth of market reporting is becoming ever more strategically critical at a time when financial services organisations are facing increasing competition for investment, both from within the sector and from other industries.
Effective communication can build lasting market confidence by conveying the strengths and future potential of the enterprise. This includes both financial and non-financial value drivers in areas such as innovation, product design and customer relationships. On the flip-side, opaque reporting can be penalised with a risk margin and higher cost of capital.
The impact of Basel II
, Sarbanes-Oxley and International Financial Reporting Standards (IFRS)
have provided a further catalyst for improvement by imposing enhanced regulatory demands in areas such as risk management and, in turn, raising the bar for analyst, investor and rating agency expectations. A more systematic and sophisticated framework of information and analysis can not only meet regulatory requirements, but also prove invaluable in enhancing the basis for tactical and strategic decision-making.
PwC has carried out detailed analysis of the first sets of mandatory IFRS report and accounts by banks and insurers. The research confirmed that institutions have successfully risen to the implementation challenge. However, the focus on basic compliance may have failed to meet analyst and investors calls for more useful and accessible insights into the business. Developing world class disclosure will be the key challenge going forward.
How PwC is assisting financial services organisations
PwC has a global network of specialists who can help companies develop effective and sustainable frameworks for meeting new market reporting requirements including Basel II
, Sarbanes-Oxley and IFRS
. We can also help organisations meet stakeholder demands for more credible and transparent disclosure.