The regulatory classification of banking institutions, concerning their competent authority, is an important aspect that determines a lot about their regulatory obligations. Based on several criteria, a bank may be deemed significant. Banks that are not considered significant are known as “less significant” institutions, meanwhile, banks that are considered significant are known as “significant institutions”. When a bank transitions from a “less significant” institution to a “significant” institution, it will undergo many changes to comply with the increased regulatory requirements.
This bank would trigger the “significant institution” criteria and would therefore fall under the direct supervision of the ECB. In order to comply with the new regulations that apply to the bank, a gap assessment was performed. Avantage Reply Luxembourg was chosen to support the Bank's remediation efforts to comply with the ECB requirements.
The Bank’s CEO Office team required assistance with the overall management of the project, including but not limited to regulatory gaps in the area of credit and risk management such as ECL, NPE, DOD, SREP (ICAAP and ILAAP) etc. The primary goals were the following:
The overarching challenge was the cross-border nature of the project. The authorized executives that were involved in the project were in different locations and worked for different legal entities. Based on their preferences, the remediation work could differ but the overall progress had to be managed centrally.
Additionally, the remediation work was performed across entities and relevant subject matter experts had to satisfy the business needs of several entities within the project.
Avantage Reply provided several full-time resources who led the overall project management activities for all gaps and informed the project stakeholders on the overall progress, while at the same time providing technical and regulatory expertise to help address specific elements related to regulatory requirements.
The final delivery consisted of: