Avantage Reply assisted one of the largest banks in Luxembourg, in continuing to address the European Central Bank’s (ECB) supervisory expectations in an effective and proactive manner. Avantage Reply’s added value relied on a benchmarking analysis against peer firms in Eurozone, enabling the bank to better understand the forward-looking regulatory requirements that the Bank should comply with.
The primary goal of the client was to improve on a range of issues of the Supervisory Review and Evaluation Process (SREP), which have gradually decreased client’s ratings over the years, while refining its supervisory dialogue with the ECB.
Client also requested a peer benchmarking evaluation as well as a forward-looking view of what the bank should expect from the ECB and local regulator in the upcoming years.
The high number of reports, generated by the compliance and risk department, combined with the difficulty to access those who slow down the analysis of the bank. Additionally, the lack of centralization of the document made it difficult to consult the relevant material in timely manner.
Very limited availability of the banks’ employees when organizing meetings on a short notice added difficulty to the project.
In most occasions, the information needed was quite hard to extrapolate, since the banks’ employees were not recognizing the existence of an issue to be addressed in the fist place.
To achieve the objectives defined by the client, the following steps were performed:
1. Multiple interviews with the three different streams: Governance, ICAAP/ILAAP, and Data & Reporting:
2. Benchmarking exercise taking into account peer banks to:
3. A detailed analysis of the relevant regulations affecting the bank have been fully analyzed and proposed in the final report: