How the Dodd-Frank Act affects Investment Banking

The regulatory reform known as the Dodd-Frank Act has been hailed as the most revolutionary, comprehensive financial policy implemented in the United States since the years of the Great Depression. Created to protect consumers and investors, the Dodd-Frank Act is made up of a set of regulations and restrictions overseen by a number of specific government departments. As a result of this continuous scrutiny, banks and financial institutions are now subject to more-stringent accountability and full-disclosure transparency in all transactions.

The Dodd-Frank Act was also created to keep checks and balances on mega-giant financial firms that were considered too big to crash or default. This was especially deemed crucial after the collapse of the powerhouse financial institution Lehman Brothers in 2008. The intended result is to bring an end to the recent rash of bailouts that have plagued the U.S. financial system.

Additionally, the Dodd-Frank Act was created to protect consumers from unethical, abusive practices in the financial services industry. In recent years, reports of many of these abuses have centered around unethical lending practices and astronomically-high interest rates from mortgage lenders and banks.

Originally created by Representative Barney Frank, Senator Chris Dodd and Senator Dick Durbin, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as it is officially called, originated as a response to the problems and financial abuses that had been exposed during the nation’s economic recession, which began to worsen in 2008. The bill was signed into law and enacted by President Obama on July 21, 2010.

Although it may seem complicated, the Dodd-Frank Act can be more easily comprehended if broken down to its most essential points, especially the points that most affect investment banking. Here are some of the component acts within the Dodd-Frank Act that directly involve regulation for investment banks and lending institutions:

* Financial Stability Oversight Council (FSOC): The FSOC is a committee of nine member departments, including the Securities and Exchange Commission, the Federal Reserve and the Consumer Financial Protection Bureau. With the Treasury Secretary as chairman, the FSOC determines whether or not a bank is getting too big. If it is, the Federal Reserve can request that a bank increase its reserve requirement, which is made up of funds in reserve that aren’t being used for business or lending costs. The FSOC also has contingencies for banks in case they become insolvent in any way.

? The Volcker Rule: The Volcker Rule bans banks from investing, owning or trading any funds for their own profit. This includes sponsoring hedge funds, maintaining private equity funds, and any other sort of similar trading or investing. As an exception, banks will still be allowed to do trading under certain conditions, such as currency trading to circulate and offset their own foreign currency holdings. The primary purpose of the Volcker Rule is to prohibit banks from trading for their own financial gain, rather than trading for the benefit of their clients. The Volcker Rule also serves to prohibit banks from putting their own capital in high-risk investments, particularly since the government is guaranteeing all of their deposits. For the next two years, the government has given banks a grace period to restructure their own funding system so as to comply with this rule.

? Commodity Futures Trading Commission (CFTC): The CFTC regulates derivative trades and requires them to be made in public. Derivative trades, such as credit default swaps, are regularly transacted among financial institutions, but the new regulation insures that all such trades must now be done under full disclosure.

? Consumer Financial Protection Bureau (CFPB): The CFPB was created to protect customers and consumers from unscrupulous, unethical business practices by banks and other financial institutions. One way the CFPB works is by providing a toll-free hotline for consumers with questions about mortgage loans and other credit and lending issues. The 24- hour hotline also allows consumers to report any problems they have with specific financial services and institutions.

? Whistle-Blowing Provision: As part of its plan to eradicate corrupt insider trading practices, the Dodd-Frank Act has a proviso allowing anyone with information about these types of violations to come forward. Consumers can report these irregularities directly to the government, and may be eligible to receive a financial reward for doing so.

Critics of the Dodd-Frank Act feel that these regulations are too harsh, and speculate that the enactment of these restrictions will only serve to send more business to European investment banks. Nevertheless, there is general agreement that the Dodd-Frank Act became necessary because of the unscrupulous behaviour of the financial institutions themselves. Although these irregular and ultimately unethical practices resulted in the downfall of some institutions, others survived or were bailed out at the government’s expense.

Because of these factors, there was more than the usual bi-partisan support for the Dodd-Frank Act. As a means of checks and balances, the hope is that the new regulations will make the world of investment banking a safer place for the consumer.

Contact Us

(+353)(0)1-443-3807 – IRL
(+44)(0)20-7193-9751 – UK

Check our similar posts

Which KPI?s to Use in CRM

Customer relationship management emerged in the 1980?s in the form of database marketing. In those tranquil pre-social media days, the possibility of ?managing? clients may have been a possibility although Twitter and Facebook took care of that. Modern managers face a more dynamic environment. If you are one, then what are the trends you should be monitoring yourself (as opposed to leaving it to others).

If you want to drip feed plants, you have to keep the flow of liquid regular. The same applies to drip-feed marketing. Customers are fickle dare we say forgetful. Denizon recommends you monitor each department in terms of Relationship Freshness. When were the people on your list last contacted, and what ensued from this?

Next up comes the Quality of Engagements that follow from these efforts. How often do your leads respond at all, and how many interfaces does it take to coax them into a decision? You need to relate this to response blocks and unsubscribes. After a while you will recognise the tipping point where it is pointless to continue.

Response Times relate closely to this. If your marketing people are hot then they should get a fast response to sales calls, email shots and live chats. It is essential to get back to the lead again as soon as possible. You are not the only company your customers are speaking too. Fortune belongs to the fast and fearless.

The purpose of marketing is to achieve Conversions, not generate data for the sake of it. You are paying for these interactions and should be getting more than page views. You need to drill down by department on this one too. If one team is outperforming another consider investing in interactive training.

Finally Funnel Drop-Off Rate. Funnel analysis identifies the points at which fish fall off the hook and seeks to understand why this is happening. If people click your links, make enquiries and then drift away, you have a different set of issues as opposed to if they do not respond at all.

You should be able to pull most of this information off your CRM system if it is half-decent, although you may need to trigger a few options and re orientate reporting by your people in the field. When you have your big data lined up speak to us. We have a range of data analysts brimming over with fresh ideas.

Increase Customer Loyalty with Field Service Management Software

One sure way to turn off customers is to give them a disappointing experience. It cuts across the board- from plumbing jobs, electrical installation and maintenance projects, window cleaning or repair, tenants in the property you’re managing, to package delivery firms. If your customers keep witnessing delays, cancelled appointments, to oversights like double booking which end up messing their individual schedules, they are likely to stop hiring your services and seek out a competitor.?

Field service jobs are particularly prone to such blunders, especially with the traditional manual way of doing things. While smartphones and computers have been infused into the day-to-day running of businesses, it is still common to find companies relying on manual processes to schedule their appointments, track the employees providing the services, monitor the progress of the jobs and ask for status updates, to managing inventory and invoices for completed tasks. This creates a major bottleneck in operations. The Small & Medium Business Trends Report, that took responses from nearly 500 SMB owners and leaders, showed that they spend an average of 23% of each workday manually inputting data. This is time that would have otherwise been spent tending to the customers? needs. It creates a backlog of tasks, forcing the customers to wait for longer to get their issues handled.?

The inefficiencies witnessed in these traditional methods led to the advent of field service business management software. These systems come in to optimise operations and enhance your service delivery. As a business, automating your scheduling, job tracking, routing procedures and handling the invoicing, all through a single platform, greatly reduces your workload. Managing inventory, communicating with your employees out in the field through handy apps on their phone, giving them access to a database of reports and notes on the various jobs they have been tasked with – these all aid in smoothing out the sorting of tasks, and gets rid of the mounds of paperwork that would have been required.?

From Your Customer’s Perspective

When you’re facing a plumbing leak at home, electrical faults that result in power outages in the office building, damaged gas boilers that are hampering operations in the industrial plants- you want them to be addressed. Homeowners, business owners and facility managers in these situations are anxious about getting the issue resolved- yet the firm they are relying on to handle it is caught up in a logistical nightmare, boggled down by paperwork that prevents them from sending their technicians to the location. You really don’t want to hear a series of excuses about why your problem could not be addressed in time. While delays can be a nuisance, cancelled appointments are altogether exasperating. See, the customer is left in a difficult position, since the problem is not resolved, and they have to contend with having to make a subsequent appointment- of which they will not be sure if they can bank on the hired firm to deliver on its mandate. With an FSM, you get to prevent such incidents from occurring.

How Your Customers Benefit From Field Service Job Management Software

Reliable services

Firstly, the customer wants services that they can count on. When an issue arises and an appointment scheduled, they want it to be honoured. With the FSM, you get to accurately schedule the tasks, from the timing involved to assigning it to the appropriate technician, who is skilled in the task. With the automated scheduling and dispatching, the technician downtime that was previously witnessed is reduced- which has the welcome benefit of cutting down your operational costs.?

Speaking of which, the confusion that was previously seen when perusing through documents and simply calling up the first employee whose skill is similar to the job description, is avoided. Here, the field service management platform enables you to determine the most appropriate member of your workforce to handle the task. This makes them more motivated at their job, resulting in higher quality results- whether it’s an installation task, repair and maintenance project, or cleaning service for companies providing them in residential and commercial buildings.?

Get it done right the first time around

The field service scheduling software enables the technician to have all the information pertaining to the job accessible in real-time. This is availed via app– that the technicians will have on their phones. It is through this very app that they will make updates of the tasks being handled, sending in notes, photos and reports to the system. These will, in turn, be monitored at the head office all through the progress of the job, being managed through the interactive FSM dashboard.?

With the customer’s history being accessed by the technician, information that includes the specs and hazards about the particular job being handled, notes from the previous technicians who had been tasked to the building- such as the installation crew and previous repairs that had been done, will enable the personnel on the ground make well-informed decisions throughout the course of the task. Any issues that arise will also be taken note of, equipment and parts ordered through the app as well, ensuring that things proceed seamlessly. That way, the percentage of situations getting fully resolved during the first appointment increases- which translates to fewer cases of complaints being made.?

Instant invoicing

Immediately the job is done, the customer inputs their e-signature through the app, and the technician marks the task as completed, the very same FSM is used to process the invoice and send out an emailed copy to the customer. This will be an accurate invoice, without any data loss, and the customer can then proceed to make the payment through their preferred mode- from credit card payments to cash, without having to wait for hours for paperwork to be processed. All this information is securely stored on the cloud-based platform.

Creating a great first impression

Your image is a core part of your operations. Certainly, you don’t want to come off as disorganised- and your customers will be quick to note this with issues like missing records, outdated reports, lateness, and improper assigning of tasks. On the other hand, having a modern digital solution integrated into your field service operations will enable you to make a great first impression, showing the level of professionalism with which you offer your services.

Customer access

FSM platforms like FieldElite also give the customers themselves access to the system, through their own dashboard. This is particularly handy given that there are cases where the customer will have multiple jobs to be carried out- like property managers who keep on having cases of plumbing accidents, electrical faults, and cleaning service needs in the different buildings that they are in charge of.?

Through the customer portal, they will be able to make appointments, track the history of repair and maintenance jobs carried out on the property, and follow up on queries. What’s more, together with the IoT where FieldElite links to ecoVaro, one can have an interactive energy management system in place to keep accurate tabs on the energy consumption, efficiency, point out areas where repairs are needed, and have technicians come over- with the bookings being made through the FSM.

Enhance Customer Experience And Score New Business Opportunities

Customer service is a key aspect of your operations. When your customers are well tended to, with their needs being met in a timely and proficient manner, it wins you their loyalty, and they’ll be more open to sending referrals your way- growing your market share. Feedback- from testimonials on your site to the reviews on your social media handles, also aids in this- and you want to have satisfied clients who will put out a good word about your brand. By investing in field software for service businesses, you will increase your employees? productivity, monitor trends, improve communication between your head office and the technicians on the ground, all of which come together to increase customer satisfaction.

Saving Energy Step 2 ? More Practical Ideas

In my previous blog, we wrote about implementing a management system. This boils down to sharing a common vision up and down and across the organisation, measuring progress, and pinning accountability on individuals. This time, we would like to talk about simple things that organisations can do to shrink their carbon footprints. But first let’s talk about the things that hold us back.

When we take on new clients we sometimes find that they are baffled by what I call energy industry-speak. We blame this partly on government. We understand they need clear definitions in their regulations. It’s just a pity they don’t use ordinary English when they put their ideas across in public forums.

Consultants sometimes seem to take advantage of these terms, when they roll words like audit, assessment, diagnostic, examination, survey and review across their pages. Dare we suggest they are trying to confuse with jargon? We created ecoVaro to demystify the energy business. Our goal is to convert data into formats business people understand. As promised, here are five easy things your staff could do without even going off on training.

Right-size equipment? outsource peak production in busy periods, rather than wasting energy on a system that is running at half capacity mostly.
Re-Install equipment to OEM specifications ? individual pieces of equipment need accurate interfacing with larger systems, to ensure that every ounce of energy delivers on its promise.
Maintain to specification ? make sure machine tools are within limits, and that equipment is well-lubricated, optimally adjusted and running smoothly.
Adjust HVAC to demand ? Engineers design heating and ventilation systems to cope with maximum requirements, and not all are set up to adapt to quieter periods. Try turning off a few units and see what happens.
Recover Heat ? Heat around machines is energy wasted. Find creative ways to recycle it. If you can’t, then insulate the equipment from the rest of the work space, and spend less money cooling the place down.

Well that wasn’t rocket science, was it? There are many more things that we can do to streamline energy use, and coax our profits up. This is as true in a factory as in the office and at home. The power we use is largely non-renewable. Small savings help, and banknotes pile up quickly.