Over the course of this year’s World Economic Forum in Davos, Switzerland, it became exceedingly clear that a coordinated effort across the globe is needed, on the political and economic front, to launch a recovery.

This call for global collaboration means the banking industry must brace itself for dramatic change. With so many players involved, there will inevitably be many measures taken to lead the world out of this crisis, yet despite the uncertainty on what 2009 holds, there are specific and fundamental shifts that banks must make.

The headlines have focused on a supposed weak regulatory framework, but the real culprit has been a framework plagued by weak implementation and lack of oversight. For example, one contributing factor to the current crisis was a misalignment of interests between the banks and the rating agencies.

It is clear that we can expect a vastly different regulatory environment across all financial markets, with potentially contradictory laws in different geographies. Banks must prepare and have the flexibility to consolidate these in their overall business strategy.

Though much has been made about the recently released $18 billion of Wall Street bonuses, most at the forum agreed that the dollar value is less of a problem than the bonus structure itself. Short-term exploits are rewarded over medium- and long-term stability. The current framework has proven unsustainable. To rebuild the trust of the global community, bankers in the U.S. and around the world will need to start rewarding long-term, stable profits, instead of short-term, high-risk windfalls.

Determining what is risky and what is not is at the heart of developing a sustainable risk and compensation framework. The risk management systems currently in place did little to stem the tide of exotic derivatives that magnified the effects of the subprime crisis. More comprehensive systems will need to be built, and banks will need to reorient their focus from rewards to risks.

We need to use any and every lever to solve the problems, but banks must not lose sight of the need to continuously innovate across all aspects of business. In the year ahead, this will start with the need to improve efficiency and productivity. Operations will need to be streamlined, transaction costs shrunk, and products and services rethought and reworked.

Overall, this crisis has led to a lack of trust in the banking industry. A mid-October Gallup survey found that only 21% of American consumers were confident in U.S. banks — the lowest percentage in three decades and a precipitous drop from the 40% who responded favorably in mid-July.

The banking industry has to work hard to regain its trust. A great step in this direction was taken recently by a financial services company that, mindful of the current environment, issued an open letter to its stakeholders in advance of its earnings release. The company was transparent about its results and financial conditions, and it volunteered to provide extensive details about the writedowns it has taken.

However, transparency is just the beginning. Bankers must make the shifts outlined above, which will help transform the definition of success from merely quantity of revenue to quality of revenue. It will not be easy, but it is necessary to rebuild a tradition of trust and a sustainable framework for the long term.

It is important to note that it was not all pessimism in Davos. The Young Global Leaders meeting revealed a promising energy and determination to solve the problems we face.

This year will be a challenging one for the financial industry, but I am confident that if we take steps in the right direction, we will be laying the foundation for a great future.