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Operational risk and risk management across multi-jurisdictions for international banking group

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A multi-jurisdictional banking group needed their Operational Risk Framework (designed by their parent company) to be rolled out and training given n risk reporting.

A multi-jurisdictional banking group needed their Operational Risk Framework (designed by their parent company) to be rolled out and training given n risk reporting.

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  • 1. Roll-Out of a Risk Framework Across a Banking Group
  • 2. • Whilst the financial reporting and general finance function was straightforward and heavily influenced by accounting practice, other areas such as deposits, equity backed investments, account handling and even compliance were going to be markedly different. • Previous attempts at rolling out the system had been flawed and ineffective due mainly to the approach taken being too high level and failure to engage the departments at a meaningful level.
  • 3. • The Framework fundamentals were sound and universally acceptable but a solid understanding of the differences between the banking and the insurance world was required and demanded an open and honest dialogue with the various heads of department. • A plan was formulated to deal with each part of the framework and priorities were made using customer importance as the main criterion and ensuring that processes were accurately recorded and the controls were adequately described
  • 4. • During the initial process identification and evaluation, important lessons were learned regarding common processes that cut across all departments, and the time saving that could be obtained by linking the sub-processes on a platform for unique and discrete functionality. • IT was obviously linked to every process from cash deposits and withdrawals, investments received and loan applications and draws. • IT was split into facilitation and a support function so that additional discernment could be made across specific functions.
  • 5. • As nobody was likely to understand the processes and controls like the process owners, they were tasked with the mapping of the processes at a high level with all potential risk areas an appropriate controls at the required junctures. • A peer test would be conducted with the 2nd in command and a quality assurance function supplied by us. • Fully documented details of the processes and a full evaluation of the control’s design and functionality with the relevant COSO apportioned category was then uploaded to the central repository for reference.
  • 6. • When all processes were identified with unique references, a quarterly process owner sign-off and 6 monthly full review was scheduled for each department. Changes were coordinated and phased to provide no loss of material functionality to customers. • Senior management reviewed and approved any changes recommended and reported through the risk committee. • Global HQ were in overall command of all data and version control management with trained local support and liaison.
  • 7. • The entire process then had to be interpreted and adapted to the European Head Office, the Isle of Man International Operation and a final review and interpretation of the fiduciary function in the Channel Islands. • The commonality of the processes in the main banking arena had provided timesaving and commonality that was applied across the other three areas. • The entire process was started at the beginning of September and scheduled for 6 months and the final documented process was received before New Years Eve – two month’s early!
  • 8. • You are always dealing with the principal when you are dealing with my firm. This means that I am the relationship manager and there is no junior partner to whom responsibility will be transferred. There is no decreased accountability, no "hand-off" to a lessinformed colleague. If your interests are at stake continually, shouldn’t you reasonably expect my continual involvement? • We can usually provide resources on a "just in time" basis. That is, our projects do not have to cover excessive overhead, such as multiple offices, large administrative backup, recruiting, partner perks, etc. We are organized to efficiently provide everything that you, as the buyer needs, but nothing more than that which means that you are paying for value and results and only minimum overhead.
  • 9. • There is more likelihood of your privacy and confidentiality being observed with fewer people working on the project. We (and/or the few people we might also involve) are constant which means that there isn’t the need to sift through dozens of differing perceptions. • We’re faster. We can respond to requests quickly, and return all calls within four hours which means to you that there is no need to worry about a bureaucracy, delays and unknown people on the other end of the phone
  • 10. • Since we handle fewer concurrent projects than larger firms, our attention is focused on the job at hand. This means that you don’t have to "compete" with another dozen or so of our clients, which may be larger, paying more or are more time-demanding. We structure our work so that every client receives maximum attention. • Your investment is controlled. There is no "meter running". We work for a fixed, valuebased, project fee. Large firms can’t afford to do that as readily because of all the people involved and their own insistence on measuring their success by billable hours. We measure our success by client objectives reached, not in “time units”.
  • 11. • The expertise that larger firms use is often whitelabelling for them by a pool of consultants available in the marketplace at any one time. We select our consultants from practising subject matter experts which means that you obtain the same or better expertise for less money, because; • Inevitably, we are less expensive. There are economies to using someone who can base their fees on each situation and not on a predetermined service scale or need for reaching a practice quota. This means quite simply better value to you.
  • 12. Click Mouse Reveal Next Phase Phase 1 We will conduct an initial appraisal at our cost – only charging for expenses (UK Only) Phase 2 We will make a proposal based on our appraisal with your outcomes and needs Phase 3 We will discuss the precise scope with you and provide you with a project price Phase 4 We will complete the work to your original scope and satisfaction
  • 13. We have a wealth of Financial Services Experience, and due to the remedial nature of our work forming over 60% of our business and that is conducted under a Non Disclosure Regime, we cannot demonstrate every client.
  • 14. We can provide all manner of assistance in • Initial risk assessment or audit — an initial analysis to identify higher risk areas of the business and weaknesses in procedures. We also do risk management design. • Business development — business analysis advice or advice on particular issues — for example, how your firm is Treating Customers Fairly and an action plan for implementing Conduct Risk across your business. • Help with setting up procedures — for example procedural manuals for recruitment, training and competence, complaints handling and anti-money laundering. May also include templates for disclosure documents, fact-finds and registers. • File audits — checks to ensure that procedures are being followed and identify good practices and weaknesses • Complaints Handling – cost effective and project managed from start to finish making your response robust and consistent
  • 15. We can provide all manner of assistance in; • Technical support — may include advice on particular products or regulatory reporting. May be available in various formats, including website, helpdesk and individual technical advice. • Training — for example competency assessments, training opportunities or product risk guidance. May be online support, regulatory updates or seminar based. • Support on individual issues — for example in dealing with a complaint, a financial promotion or a particular suitability letter. • Financial promotions (all areas of advertisement) - full support which would include websites, brochures, DVD's, email templates, client mail shots, adverts, contacting existing clients and so on. • Remedial work — helping to action remedial work required by the FCA/PRA. • And much more … just ask!
  • 16. Compliance Consultant www.compliance consultant.org Tel 07801 864980 (UK) Tel (+44) 7092 289901 (Int) We operate across the UK, Europe and the Middle East. Currently exploring opportunities in Latin America

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