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Case Study

Internal Audit Co-Sourcing - COREP

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The customer is a strong financial player present worldwide providing services in banking sector and insurance. The goal of the project was to conduct a co-sourcing Internal Audit on Common Reporting (Corep). Avantage Reply provided the client with a tailored assistance to its specific needs bringing its expertise and knowledge in order to perform high quality assessment of Corep governance processes.

CUSTOMERS GOALS

The objective of the project was to provide an independent assessment of the effectiveness of the controls that management is operating to mitigate the in-scoped risks linked to Corep.

THE CHALLENGE

The Audit was covering the process for the Corep to the supervisory body which is highly regulated with Capital Requirements Regulation (CRR) and European Banking Authority (EBA) guidelines. The technical challenge was due to difficulties associated with working in remote. Because of circumstances linked to COVID-19, all the communication required for the project delivery was done via conference calls.

APPROACH AND SOLUTION

The on-site inspections conducted by Avantage Reply focused on Common Reporting (Corep). The inspection specifically focused on the banks’ processes for the generation of:

  • Risk Weighted Assets (RWAs) and own funds for Common Reporting (COREP)
  • Large Exposure Returns (LEX)
  • And (iv) Liquidity Coverage Ratio (LCR)

The following areas were examined as part of the thematic inspection:

  1. The structure of the Regulatory Reporting Function, including the controls, procedures and governance arrangements around the production of the Regulatory Returns
  2. The appropriateness of the data quality verification, collection, reconciliation and validation processes utilised prior to submission of the Regulatory Returns
  3. The correctness of submission of final reports

CUSTOMER DESCRIPTION

Our customer is an international bank and insurance company, serving 100 million customers with 160,000 employees, present in 62 countries. Worldwide, the company is the number 1 insurance brand and is a strong financial player in Belgium. Our customer offers the various services of a traditional bank: the banking account, savings books, consumer loans, home loans and stock market investments.