Skilled Person Report relating to risk and controls of an overseas owned investment bank
The UK regulator had a concern that the firm’s finance and risk management functions were not effective. They required a Skilled Person to assess the adequacy of the firm’s IT systems and overall resources of the finance function and the entire risk management framework. The regulator required the Skilled Person to review risk and finance in depth in order to make specific recommendations to enhance the design and operational effectiveness of the teams.
We won the assignment although we were not on the specific Lot of the Skilled Person Panel. We stood out from our peers because of the technical and experiential competence of our team. We assembled a team that could cover the broad range of subject matter knowledge required for this review including expertise in investment banking, compliance, risk management, IT systems implementation (including core banking system), operational resilience, governance and culture. Our approach focussed on uncovering the root cause, or causes, of the numerous challenges the firm faced across many different areas of the bank. This process required us to:
– combine our technical banking experts and our governance and culture leads in our initial fieldwork phase;
– carry out evidence based analysis on our specific findings from document reviews, interviews and meeting observations;
– overlay our analysis with our knowledge of system dynamics and organisational design to trace the symptoms we observed back to their underlying causes; and
– design a realistic remediation plan with the firm’s management team that would bring effective and decisive change to the organisation and enable it to make further enhancements that would address the complex challenges sustainably.
Our team was able to present a concise but insightful analysis of the firm’s challenges to the UK regulator that went beyond improving systems, policies and procedures. Instead we were able to design an appropriate remediation plan in collaboration with the firm’s management team, with their full support, to enable the senior executives to take the appropriate steps forward to address the many challenges they faced.