BSG (UK) - Why bother with BAs on a compliance initiative?


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BSG (UK) - Why bother with BAs on a compliance initiative?

  1. 1. INSIGHTSWhy bother with Business Analysis on a compliance initiative? Compliance is just a business case for another form of business change. In a recent assignment to assess FATCA readiness at a banking client, we discovered that the three different banking products each had a different front-office origination process. In the wake of this discovery, part of our recommendation set was, unsurprisingly, to consolidate processes and reap the various benefits that accrue from this. It all seems so obvious - but is it really? All too often All too often compliance projects start with a specific endpoint - ensure that we get the compliance projects relevant tick in the relevant box to allow us to continue operating. As a business case, “compliance” is pretty bullet-proof. Those billion pound fines aren’t well received by are just looking to put shareholders and the notion of criminal liability is not appealing to bankers. But is ticking athe relevant tick in the box enough? relevant box. MOT Certificates, just £30 if you book online! Compliance projects create context for looking under the hood of process. Looking under the hood provides a good analogy. If you’re just looking to tick off some MOT checklist you may find a few disparate faults, report them for fixing and be on your way. Those faults will be quickly repaired, often without consideration as to how they relate to each other or to other aspects of the car. You could take the view that once you’ve popped the bonnet, you might as well look at the engine properly. With this mindset, you will likely consider how the faults relate to each other and how that oil stain in the garage, not strictly part of the MOT check, is an indicator of a bigger problem. There’s a much greater chance that you identify systemic issues and any subsequent fixes will be about the longevity of the vehicle rather than just being able to get an MOT sticker. Compliance projects are no different. With a tickbox mindset, you’ll implement a few changes and be on your way. These changes will often introduce more onerous steps into the process without considering the upstream and downstream implications and / or opportunities. Over the years, they pile up and processing becomes increasingly unwieldy. If - however - you take the opportunity to step back and consider the broader context, the project will likely create a series of opportunities to improve business process, remove redundancies, access better customer / transactional data and so on. Each time you look at the relationships between people, process and technology, there is room for improvement. If you build these benefits into the business case, all of a sudden defence (compliance) becomes offence (making or saving money). At a higher level of abstraction, compliance projects create context for looking under the hood of the fundamental operating model. For example, one trend we’re seeing in the Dodd-Frank space is restructuring of deals to move the compliance requirements into specific geographies. So rather than transacting with counterparties across the globe, move all deals of a certain type to a single counterparty location which means ensuring that there is only a need for additional, often onerous, process changes in a single location. Business Systems Group (UK), Registered in England No. 6150570, 230 City Road, London, EC1V2TT // @bsguk This document can only be reproduced in its entirety. This document does not constitute any form of advice from BSG (UK).
  2. 2. INSIGHTS Why bother with Business Analys is on a compliance initiative?Is your compliance project Creating opportunities for improvement merely ticking boxes? Or It’s all about systems thinking. Are you considering the “business system” as a whole or just is it creating opportunity looking at constituent parts? By business system, we mean not just the IT, but the entire set of interconnected processes that operate to achieve some predetermined business goal (e.g. for improvements across register a new customer, process a transaction, etc.).your process architecture? Our observation is that traditionally compliance projects tend to be quite focused on meeting the checklist. Our sense is that this is a lost opportunity. The business case already creates context for some change. Using the context to look at a broader system rather than just ticking the box will allow you to get more for your change spend. Taking the opportunity to engage the change with a broader mindset will naturally open up avenues of opportunity which otherwise may not have been realised. Engaging the right mindset Business Analysts bring a It is all but essential to have legal advice on a compliance project. There is a need for specific cross-silo view of process expertise to interpret the regulation and identify how to meet it. This is often about making sure that particular data elements are recorded, reported, analysed, etc. These data elements to compliance projects. are often not considered from a systems perspective, but purely as discrete entities. The business analyst (BA) however, has a different world view. BAs love breaking down silos. The BA will start asking questions like “Where does that piece of data come from?” and “What happens to it further on in the business process?”. BAs take an end-to-end view of the business system and consider both the impacts and the opportunities created when processes require change. BAs ask different questions and look for different things. A project team which brings together these skills will, inevitably, deliver more bang for buck in the change space. The legal advice will identify how to operate in a compliant fashion. The BAs will consider how to deploy these changes from a broader, end-to-end context, in a way that takes best advantage of the change project. Compliance undoubtedly creates a business case for change, but creating opportunity out of the change requires a mindset that is broader than solely achieving compliant processes. A mindset that is the bread-and-butter of a BA’s project approach. BSG (UK)At BSG we are passionate BSG is passionate about being a proactive force for positive change. We bring a benefits-about design and delivery oriented, cross-silo mindset to business problems looking for opportunities to address people, process and technology issues.of change that makes adifference for our We’ve observed that compliance projects are often maligned as mere tickbox exercises. Bycustomers and their contextualising the projects and understanding the opportunities they offer, we believe thatcustomers. compliance is both interesting and important. We talk about this in more detail at We’ve a deep track record in the financial services sector and have a number of business analysts with experience in delivering compliance projects. We’ve detailed our approach to these projects at A collection of BSG (UK) BA practitioner // @bsguk insight can be found at +44 20 3416 6400 Business Systems Group (UK), Registered in England No. 6150570, 230 City Road, London, EC1V2TT