Thorny issues await leaders from the world's largest economies as they gather this week for the G-20 summit in Seoul, South Korea. Promoting global economic recovery, addressing trade surpluses and deficits, and reforming the world's financial system are all on the table.

Financial institutions will be closely watching another item on the summit agenda — the debate over the Basel III capital, liquidity and broader risk-exposure guidelines introduced in September by the Basel Committee on Banking Supervision.

The reverberations of any final decisions about Basel III will be deep — the amount of reserves that banks will now need to set aside affects not only the security of the financial system, but banks' growth outlooks as well.

Given the wide disparities in economic strategies and the political makeup among the G-20 countries, however, the group has already agreed to defer final decisions on many of the important aspects of Basel III to later dates. Still, the Seoul summit will be a significant next step in setting the direction of regulation for the industry just two years after the financial crisis.

The challenge for banks is to chart a course that rewards shareholders and customers, while avoiding unacceptable levels of risk and business practices that perpetuate the kind of boom-and-bust cycle seen all too often in recent years.

Banks should begin addressing the main elements of Basel III now — instead of waiting for the ink to dry on the final reforms sometime in the future. The direction has already been set, so those institutions that can move ahead rapidly will be in a better position to devote leadership attention and resources on customers, competitors and profitability, as opposed to internally focused regulatory metrics and ratios.

Investing in capabilities that enable compliance with last summer's Dodd-Frank Wall Street Reform and Consumer Protection Act will also serve banks well in anticipating the Basel III reforms.

In an Accenture survey of more than 100 financial industry executives conducted after the passage of the Dodd-Frank bill, two-thirds said regulatory changes will require rethinking of existing business models. Among the initiatives the executives said they need to undertake are: incorporating and integrating risk management into performance management metrics; enhancing automation of financial and regulatory reporting; building more accurate pricing and valuation models for each customer offering; conducting deeper analysis of counterparty exposures to avoid the domino effect that was so destructive in the run-up to the financial crisis; and designing products to reflect changing customer attitudes toward risk and new regulatory realities.

We see three major areas in which banks can begin to improve their overall risk management in light of Basel III and the expected G20 guidelines.

First, banks must accelerate the integration of the risk and finance functions. The chief financial officer and the chief risk officer must work from a single set of information, and share an understanding of the interrelationships among credit, market and operational risk. Enterprise risk management must become a reality rather than a goal. Risk must be seen as a growth and profitability-enhancing capability, not as a back-office or compliance function.

Second, banks must improve data management. They will need to produce higher quality data and maintain it across the enterprise. The rise of the chief data officer — a new and senior-level position at many banks — is a reflection of banks' recognition of this need.

Third, banks must prepare for what we call "intelligent growth." In entering new markets, for instance, banks can mitigate credit and operating risk through greater use of analytics and automation of credit scoring to enable more efficient and less-risky lending operations.

The Seoul summit will shine a global spotlight on the establishment of a more robust and uniform set of financial rules and a consistent time line for adherence. But in the meantime, banks would be well advised to begin incorporating the principles of the regulation throughout their operations. Those that do will be better positioned to compete effectively over the long term.

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