Regulatory Reporting Remediation Program - meeting ECB and CSSF requirements

Avantage Reply assisted a well-known Private Bank in Eurozone in improving the quality of FINREP & COREP reporting and in documenting internal production process. Out client needed to meet the requirements for the production of the harmonized reporting for European Central Bank (ECB), both in terms of quality, timely delivery, as well as in term of management of its interaction with the local regulator. Since reporting activities have been offshored, client must demonstrate that its interaction with service provider fulfils additional requirements from EBA and local regulator’s guidelines for outsourced functions. Avantage Reply team defined and implemented adequate control framework, supported analytical review of reports and documented operational aspects of the process. As result, regulatory reports were submitted within regulatory deadlines with considerably higher quality of data.

CUSTOMER GOALS

With growing pressure from both European and local regulators to reach high quality of submitted reporting and to demonstrate the sustainability of internal processes, our client launched the remediation program to strengthen FINREP & COREP reporting process. The key objectives of the program were:

• Streamline submission process shared by oversight and production teams for timely submission of reports
• Improve quality of data flowing from multiple sources with set of controls at all stages of the process
• Ensure the interactions with local regulator are managed in timely manner with appropriate level of data exhaustiveness

CHALLENGES

Our client has started a two-year program of remediation aimed at fostering the quality, documentation and organization of its regulatory reporting processes in a client-specific environment:

• Newly offshored regulatory reporting process resulting in strong need for role and responsibilities reallocation and training
• Complex IT architecture with several reporting and database tools, often managed outside of local scope
• Strong dependency with evolving IT environment, i.e. migration to Group tools
• Non-standard corporate deal business resulting in elaborated accounting entries and specified prudential treatment

APPROACH AND SOLUTION

Avantage Reply defined an approach to manage all of the client objectives, providing a holistic and dynamic solution. Avantage Reply placed a team for the project management, a team for the remediation implementation as well as a team for the regulatory reporting production support. The former ensured that all the topics were adequately followed-up to ensure a timely delivery vis-à-vis the regulator, e.g., set-up and orchestration of Operational and Steering Committees, support in communication to local regulator. The second provided its expertise to improve the technique and organization at every stages of the regulatory reports production. This team focused on:

• Putting in place issues logging tool in order to set a sustainable solution for processes improvements
• Design and implementation of end-to-end production control framework to improve the quality of reported data
• Business analysis to identify areas of improvement and implementation of automated solution (Alteryx)
• Documentation of operational aspects of the process to highlight roles and responsibilities of the reporting teams and to formalize data and process flow

The latest ensured that the client was properly trained and up-to-date with every best practice in term of regulatory reporting. This team also supported client in production controls and analytical review.

RESULTS AND BENEFITS

Regulatory reporting remediation program allowed our client to optimize the production efforts and to achieve significant improvement in quality of reporting, recognized by local regulator. Solid control framework and formalized process contributed to enhanced governance and risk management in line with ECB and local regulator’s requirements.