The Client: A Global Bank

Overview

The bank’s senior management acknowledges that loss prevention is an important aspect of risk management; and endeavors to optimize performance of the bank by understanding, and mitigating the effects of adverse operational losses on its business.

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Challenges

As the bank’s global operations extended, the bank faced an array of risk challenges. The bank’s senior management identified implementing an integrated risk platform as the only solution to manage all associated operational risks. However, collating multi-dimensional loss information on operational risk parameters came as the major bottleneck. The bank had heterogeneous risk management programs running across multiple business units; therefore consolidating global information on loss, near-misses, scenario, issues, and risk exposures became a formidable task. There was no single system of record for loss data, which limited access to the loss information and made it difficult to classify and report on losses in multiple categories. Moreover, the bank was unable to integrate internal loss data with external loss data.

The bank’s Chief Risk Officer explains, “We were spending excessive amount of time in administrative tasks such as aggregating loss information across multiple business lines, documenting exceptions, calculating gross loss information, allocating appropriate capital, and reporting risk exposures to the senior management and the board of directors. We needed an integrated system that could consolidate loss data from sub-systems at various geographical locations, facilitate customized loss reporting, support a centralized loss database system, and enable a comprehensive risk assessment methodology.”

Going forward, the bank intended to leverage the solution to fill any gaps that the bank might have identified - further improving the accuracy of modeling and other evaluation tools, and creating the potential to reduce capital charges.

MetricStream provided us with state-of-the-art enterprise-wide loss management tool that captured losses, and provided a remediation structure for reassessing risks and controls, compliance policy reviews, and business process changes. We are particularly pleased with the transparency of records, and the solution's ability to determine upto- the-minute status of all issues and actions. Implementing the MetricStream solution is a positive step toward our goal of continually increasing workplace productivity.

Benefits

  • Improved Efficiency:
    The MetricStream solution implemented systematic and paperless process across the enterprise with standardized loss data collection process. Loss events and incidents are registered consistently and with data integrity assurance; and are linked directly to the risks or controls that failed. Efficient loss event tracking, email based notifications and alerts, and risk assessment methodologies allows the bank to implement the industrybest practices for efficient loss management and prevention.
  • Enhanced Visibility:
    With the MetricStream solution, the bank has a complete visibility into loss events and resultant remediation process. This leads to better risk management and assured compliance.
  • Integrated Loss- and Risk Management:
    The solution allows the bank to integrate loss management with the Risk Management process and support assessment of risks based on parameters, such as severity and likelihood of occurrence. The solution tracks issues identified during the root cause analysis process, and ensures a closed loop management process, reducing the number of events and minimizing their impact to the organization.
  • Achieved Compliance with Basel II Requirements for Loss Events:
    The MetricStream solution provides a comprehensive enterprise-wide solution that streamlines the collection, calculation and reporting of operational risk parameters, as per the Basel II Accord.

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