Building a Resilient Future: A Global Bank's Journey with Risk Change Strategic Program Optimization Achieves a 50% Cost Reduction
A global bank was focused on delivering risk change strategic programs to optimize business processes across the Risk division. These programs covered various areas such as Enterprise Operational Risk Management (EORM), Market Risk, Credit Risk, Securities Europe Limited - Brexit Program, Treasury, Liquidity Risk, and Liquidity Risk Quant. Additionally, the bank was committed to maintaining current processes and systems through the delivery of "Books of Work," aligning with the target operating model strategy for the next 3-5 years.
Key Business Challenges
The key challenges faced by the bank in optimizing its risk change programs were:
Documentation and Execution Transparency: Efficiently documenting and managing business cases, regulatory obligations, and various change requirements to provide execution transparency to stakeholders in operations, business, data governance, and technology.
Regulatory Compliance and Data Quality: Ensuring compliance with regulations and consistent data quality across risk architectures while reconciling data and automating processes.
Cost and Resource Optimization: Reducing program costs, transitioning away from expensive vendors, and minimizing reliance on subject matter experts (SMEs) for change initiatives.
To address the challenges and optimize risk change programs, following solutions were implemented:
Change Documentation and Process Optimization: Comprehensive documentation of business cases, regulatory obligations, and change requirements was carried out, along with optimizing the Software Development Life Cycle (SDLC) and data quality/governance processes. Execution transparency was provided to stakeholders in operations, business, and technology. Continuous improvement and innovation in processes and data quality were also emphasized.
Regulatory and Data Analysis: In-depth analysis of regulations, current processes, data, and systems was conducted to ensure consistency with risk architectures. Data quality and reconciliation were prioritized, and automation was introduced to reduce effort in productionizing changes and streamline the audit process.
Cost and Resource Reduction: The bank achieved a 50% reduction in program costs by transitioning away from one of the Big 4 vendors responsible for managing the risk change portfolio. Agile transformation was undertaken to reduce time-to-market for changes, and integrated risk monitoring services were implemented to minimize reliance on SMEs.
The implementation of risk change program optimization resulted in several positive outcomes for the global bank:
Cost Savings: Significantly reduced program costs by transitioning away from a major vendor, optimizing resource allocation and improving efficiency.
Improved Time-to-Market: The adoption of agile methodologies reduced the time required to productionize changes, enhancing the bank's responsiveness to market demands.
Enhanced Risk Monitoring: Integrated risk monitoring services led to improved periodic capital reporting and reduced dependency on SMEs, enabling better risk management practices.
Consistency and Model Enhancements: Ensured consistency with risk architectures and successfully implemented model enhancements for stress scenarios and other critical calculations.