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Case Studies

Case Study

EMR Gap Analysis FINREP, COREP, LEVREP

FOCUS ON: Case studies,

SUMMARY

Under its Regulatory Reporting Remediation Programme, the client was reviewing the Governance of the production process of the Financial Reporting (FINREP), Common Solvency Ratio Reporting (COREP) and Leverage Ratio Reporting (LEVREP). The Bank mandated Avantage Reply to provide a benchmark of the production process of its regulatory reporting in the Bank against the Group process through a Gap Analysis.

CUSTOMERS GOALS

The principal objective of the client was to optimize the quality of the reporting process and improve timing of delivery. This was performed through the creation of the Regulatory Reporting Remediation Programme. The Gap Analysis representing a stream of this Programme had for principal goal to bring recommendations on the organization and separation of duties between the Risk and Finance Department for the regulatory reporting. The Gap Analysis distinguished between intrinsic gaps and incidental gaps, and, for the gaps that needed to be closed, a separation between quick wins and gaps requiring long term action plan.

THE CHALLENGE

The main challenge encountered during this mission was that the project was comparing processes with two moving targets. Indeed, on both sides (the client and the target operating model of the mother company) there were ongoing projects tackling tooling migration, process review and implementation of control frameworks for each reporting.

Entities had two different contexts that we highlighted as intrinsic gaps:

  • The reporting perimeters were different. The client was in charge of producing both the CONSO and SOLO reporting and the Group only the CONSO while benefiting from data certification package;
  • The group tools were tailored to Group specifications and not local needs yet.
  • Different setups in terms of offshoring

APPROACH AND SOLUTION

Process analysis and governance discovery were performed through workshops with the different parties involved in the reporting, at both Global HQ and our client. In those workshops we focused on the gaps between the current reporting practices with the principles laid out in the Group’s Target Operating Model and BCBS239.

We designed a Gap Analysis that provide the client with specific detailed information on their current reporting process for FINREP, COREP and LEVREP and their specifications, systems capacity, adjustments, data sharing and validation.

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