Banks and financial institutions are subject to various types of regulatory and legal examinations by federal, state, and international supervisors. The frequency of these examinations may vary depending on whether they are for safety and soundness, compliance with applicable laws and regulations, or specialty requirements. In certain cases, especially for large financial institutions, these examinations may extend throughout the year, as regulators examine each area of the bank. This, coupled with the expanding scope of the examinations and the fast changing regulatory and legal landscape (Dodd-Frank Act, Consumer Protection Act, Basel laws, Anti-Money Laundering AML rules, and others), necessitates the effective and efficient management of the examination process.
International regulatory bodies such as the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) in the U.K., the Hong Kong Monetary Authority (HKMA), and the Monetary Authority of Singapore (MAS) are required to perform annual reviews or examinations at domestic banks. Considering the plethora of examinations, and the potential issues that could arise during reviews, it is important for senior management to devote a substantial amount of time to draft a robust action plan.Download a Solution Brief
MetricStream Regulatory Examination Management Solution
The MetricStream Regulatory Examination Management Solution enables your organization to efficiently manage regulatory examinations across internal entities, as well as external entities such as suppliers and contractors. It allows you to manage the examinations process seamlessly from the time the “first day” letter is received, till the final response is submitted to the regulator.
The solution also helps implement industry best practices for regulatory examination management by providing advanced capabilities such as automated task management, built-in action plan and remediation workflows, email-based notifications and alerts, and pre-configured reports and dashboards.
The MetricStream Regulatory Examination Management Solution offers the following benefits:
- Provides a central repository to easily organize, secure, and access the documentation required for a forthcoming examination
- Helps compliance managers and process owners across the organization manage regulatory examination assessment programs, and ensure the effectiveness of controls and activities designed to meet regulatory requirements
- Enables you to build a strong reputation among regulators, as a result of responding appropriately and quickly to regulatory examinations, and implementing effective remediation plans
- Supports multiple languages on the same platform – a much required feature for a company operating in multiple countries with different languages
Features and Functionalities
- Examination Scoping and Planning - Pre-Examination Preparation
During the examination scoping and planning exercise, the solution enables you to organize pre-examination materials, facilitate management and compliance team interviews, and schedule onsite examinations for the specified business units. The web-based central repository can be used to store and organize examination materials, including first day letters, internal audit reports, branch examination reports, email records, internal reports, and other aggregated data. This helps ensure that the requested materials are available on a timely basis, so that examiners can easily understand your firm’s business and methods of operation.
- Examination Management - Capturing and Organizing Findings
The solution provides comprehensive functionalities to manage regulatory examinations related to safety, soundness, and overall regulatory and legal compliance. During the examination, the solution facilitates communication, and captures relevant information exchanges between the examiner and your financial institution representative. The solution also acts as a centralized source for documents required during the examination. It helps capture and organize exam work-papers, interim status reports, exception sheets, draft comments, and other key findings or issues. This enables you to be aware of any major issues prior to the conclusion of the inspection. It also gives you the opportunity to clarify your organization’s position. In addition, the solution has the ability to track and manage interactions with regulators, and appropriately flag documents that are sent to them.
- Examination Closure - Remedial Action Planning
The solution helps you follow a consistent and structured process of managing and tracking key examination findings or issues. It allows senior management to promptly review the draft report, and take appropriate remedial actions on key issues identified. It also helps draft and circulate a detailed response. Remediation plans can be appropriately documented, assigned, managed, and tracked to closure. Each remedial plan clearly identifies the issue, describes the remedial steps, assigns responsibilities, and defines timelines for the action items. Various reports and dashboards track the progress of each plan.
- Regulatory Reporting and Dashboards
The MetricStream platform has an embedded proprietary reporting engine that maintains a strong repository of standard reports, including historical reports. The solution ships with several pre-configured reports and dashboards that can be customized for examinations, findings, investigations, audits, issues, and recommendations. The solution can also be set up to generate a deficiency letter and response letter. In addition, it has the capability to archive older reports and responses to previous examinations. Custom reports can be built using the simple Reports Wizard tool that does not require any programming.
Below are the key highlights of the MetricStream Regulatory Examination Management Solution:
- Ability to automate the examination management process, significantly reducing the time and costs involved, and freeing up resources for value-added activities such as constructive interaction with the examiners and appropriate resolution of findings
- Built-in business intelligence with the ability to create custom reports or responses, and email or export them into formats such as MS Excel and Adobe PDF
- Robust, multi-level security and access controls with support for hierarchy-based organizational models and org-role pairings
- Fast implementation with a workflow and collaboration engine that provides configurable form design and creation capabilities, information flows, notifications, alerts, and escalation paths