The Client: A Leading Global Bank

Overview

Operating in multiple regulatory environments, and managing a growing list of risks have become major challenges for financial institutions, especially in the aftermath of the economic slowdown. Along with the fluctuating market conditions, some of the key challenges that most financial institutions face are the changing regulations with multi-jurisdictional requirements, and the pressure to ensure uncompromising compliance despite reduced budgets and significant resource constraints.

For organizations that have geographically diverse operations, it becomes all the more complex to manage the plethora of existing and emerging regulations. Furthermore, relying on dispersed teams and disconnected systems adds to the challenge of dealing with volumes of new regulations, tracking the changes in regulatory policies, and gauging their impact on global operations.

The Bank had built a rule mapping system to meet its regulatory requirements in a number of offices across geographies, but the processes were largely fragmented, non-standardized, and manually cumbersome. As a result, the Bank could not get an enterprise-wide view of compliance and risks, and also found it challenging to gather critical information needed to identify and address regulatory risks in real time.

In response to these challenges and pressing regulatory demands from the Federal Reserve, the FSA, Basel Accord, and external auditors, the Bank felt it necessary to implement an automated regulatory compliance solution. This would help them manage and map regulatory compliance through an integrated and centralized approach, track regulatory updates, and connect and correlate them with policies and controls across their operations worldwide.

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Solution

The Bank implemented an automated, cost-efficient, and centralized regulatory compliance management system that would help them ensure comprehensive enterprise-wide compliance, while reducing the overall cost of compliance. The Bank was able to map internal policies to the rules and legislations. Moreover, they could determine the status and impact of regulatory developments, assess regulatory risks, track the status of implementation efforts, and demonstrate compliance and effective risk management practices to regulators, customers, and other stakeholders.

Before implementing the new system, the Bank carefully studied the market, and evaluated various compliance solutions. Eventually, the Bank chose MetricStream’s Regulatory Compliance Management Solution due to its integrated and centralized platform approach, flexible architecture, powerful collaboration capabilities, and its intuitive framework for managing and linking regulations and regulatory changes to internal policies, risks, controls, and processes across the various locations the Bank was operating in.

The MetricStream solution provided the Bank with multiple regulatory compliance management capabilities, including:

An updated regulatory content repository
With the Bank operating in a constantly changing regulatory environment, the solution’s regulatory data feeds capability automatically captures regulation related events from various regulatory bodies, central banking systems, equity market regulators, stock exchanges, credit bureaus, and other external sources such as Complinet, LexisNexis, D&B, and ComplianceOnline, as well as emails and RSS feeds.

The updates are configurable and stored in a categorized and hierarchal manner, providing a powerful and comprehensive inventory of changes in laws and regulations. This helps ensure that the regulatory and compliance teams are always up-to-date on new and emerging regulations. It also helps the Bank analyze regulatory changes, and understand how they may affect the business. Teams can quickly inform the board when the risk level changes significantly, and can implement the necessary control and mitigation steps.

Centralized regulatory content management
MetricStream’s Regulatory Content Management Module provides a central repository for integrating regulations and laws from various sources, and organizing and storing them as a rationalized set. This enables the Bank to avoid duplication of rules and laws across the enterprise. Rules can be stored in various templates, and classified based on an automatic or user-defined numbering scheme. Users can run an advanced search on this content to retrieve information, and use import functions to define rules within the system for an article or a list of articles. The module also maintains a revision history, and enables users to schedule reviews for regulatory compliance processes.

Comprehensive view of the impact of regulatory changes
The solution’s Regulatory Change Management Module provides comprehensive functionalities to identify the impact of regulatory changes on existing policies, and communicate them downstream to relevant jurisdictions, regions, countries, business units, product lines, and functions. The robust architecture helps perform an in-depth impact analysis of the changes, and tag regulatory alerts to respective businesses. The built-in automatic notification and alert functionality with configurable workflows facilitates regulatory content distribution and implementation.

Mapping of regulations and rules to risks, controls, and policies
The solution‘s mapping capability links regulations and regulatory changes to internal policies, risks, controls, and processes. A workflow-based process automatically alerts relevant stakeholders for necessary action and process changes. The solution also identifies and maps the locations in the organizational structure to which the laws and regulations apply. Users gain transparency and visibility into what has been achieved by the existing policies, procedures, and other mitigating controls. The solution also supports electronic sign-offs at departmental and functional levels for executive certifications.

Compliance monitoring and reporting
The MetricStream solution provides powerful dashboards and reports with drill-down capabilities that help in closely tracking and assessing the status of compliance in real time. Using these tools, the Bank can measure the progress of compliance in relation to pre-determined milestones, identify gaps and loopholes, and identify what needs to be done to strengthen enterprise-wide conformance to various rules and regulations.

Issue management
Any compliance issues that arise are automatically routed by the MetricStream solution through a systematic and closed-loop process of investigation and remediation. At every stage, the Bank can track the status of the issue, and ensure that it is resolved effectively and in a timely manner.

Challenges

Before upgrading their regulatory compliance system, the Bank experienced the following challenges:

Manual processes for regulatory compliance management 
With its large global presence, the Bank managed its global rules, regulations, and compliance programs in a traditionally maintained program which was largely widespread and deployed on a combination of homegrown systems, point solutions, spreadsheets, and manual processes. This led to redundant, overlapping, and ambiguous processes.

Lack of integrated and centralized rules and regulations management
The Bank had extensive operations worldwide and a vast number of regulations to manage. The lack of an integrated and end-to-end rules and regulation management system led to inconsistent implementation of compliance policies and rules across operations. This, in turn, increased the overall cost of compliance, and made it difficult for the Bank to track relevant risks arising from regulatory changes.

Lack of integrated regulatory content
The absence of integrated regulatory content impaired the Bank’s ability to identify gaps among internal policies, track new regulations, and understand their impact across the enterprise’s operations. Moreover, as there was no “single source of truth,” the review teams found it a challenge to test the effectiveness and appropriateness of compliance processes and controls across the enterprise, especially when compliance requirements were revised.

Limited visibility
The Bank’s siloed and manual system did not provide real-time visibility into risk, compliance, and audit processes across the enterprise. This impacted the identification and management of regulatory risks. The Bank’s compliance team had to rely on manually compiled reports that took significant time and resources to prepare, hindering crucial decision-making.

Why MetricStream?

MetricStream’s solution seamlessly maps together multiple regulations, policies, and controls across varying business units and locations on a single, centralized platform.

The solution provides excellent reporting and analytics capabilities that offer in-depth visibility into compliance processes, and help identify and track compliance mandates and risks in real time.

MetricStream’s integrated approach helps break down organizational silos, and improve collaboration across the enterprise.

MetricStream’s solution displays a high degree of sophistication to support complex organizational models, while at the same time providing a user-friendly interface.

MetricStream has extensive experience and expertise in providing scalable and flexible solutions to global players in the financial and banking industry. The company also has the ability to support and understand the requirements of organizations of varied sizes, organizational structure, and complexity.

Benefits

  • Enhanced visibility
    The solution’s powerful compliance charts and dashboards provide enterprise-wide visibility into the compliance management system, and highlight issues that need to be addressed. Moreover, through the seamless distribution of consistent regulatory content to business units and product lines, the Bank has gained a complete view of policy changes across the organization.
  • Reduced costs and improved efficiency
    The MetricStream solution is embedded with operational efficiencies that reduce the time, resources, and effort required for compliance and risk management. This enables the Bank to focus more on their core business objectives.
  • Improved standardization
    Integrated and standardized compliance, policy, and change management capabilities help synchronize compliance documentation and business processes, and minimize deviations, errors, and redundant activities. Streamlined processes for risk mitigation and control enable process owners to take direct responsibility for managing controls, while helping auditors to focus on key compliance risks and project oversight.
  • Integration with external systems
    The MetricStream solution integrates with a number of the Bank’s existing IT systems as well as best practice processes that have been created over decades. This has helped ensure smooth adoption and implementation of the solution across the Bank’s geographically dispersed operations.

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