Financial intermediaries, and specifically, banking institutions and companies providing investment services, are facing increasing challenges due to competitive pressures and the changing regulatory landscape. Both in Europe and in the United States, new competitors, evolving growth strategies and legislative initiatives of supervisory authorities responsible for the banking and securities markets, are reasons for companies to modify and adapt the way they operate their businesses.

This new set of rules impacts the core of financial processes:

· Redefining the nature and accountability of own capital
· Imposing new liquidity measurements and limits
· Banning excessive leverage or asset encumbrance
· Imposing tougher risk metrics and capital requirements
· Expanding transparency and reporting obligations to new activities and markets
· Creating new distribution channels that need to be exploited efficiently
· Changing the way companies liaise with their customers and sell their products and services

Coping with these challenges requires firstly an in-depth understanding of the new regulation operational impact and how it affects business processes and procedures, and secondly, a clear plan about how technology can help to close the gap efficiently and in compliance with applicable requirements and timeframes.

Operational impact of new regulation and competitive processes

Financial companies’ business areas are frequently overloaded with day-to-day operations. They don’t have the time to review incoming drafts of new regulation or to assess how new distribution channels or selling strategies will impact their business processes, their system requirements, or their staff and budget needs.

Optimissa’s consultancy division makes a great effort to be permanently connected both to the academic and political bodies issuing new regulation, as well as to the clients that must deal with these competitive changes. Due to the fact that our clients include almost every key player in each market, we have an in-depth understanding of how regulatory changes need to be implemented, and which are the best practices to respond to new market or strategy needs.

Optimissa is able to share this knowledge through its consultancy services, performing gap analysis exercises, definition of functional requirements, or business processes re-engineering.

Advisory in risk and compliance duties

Measuring market and counterparty risk, defining granular risk limits and controls, evaluating the soundness of internal auditor activities, preventing any involvement in money-laundering activities, or ensuring full compliance with applicable regulation are all tasks that are becoming increasingly complex and specialised.

We provide this kind of consultancy services to several clients and we can leverage and share our knowledge in these areas by performing due diligences or gap analysis, by defining functional requirements to be fulfilled, or by providing ongoing advice or outsourcing on such issues.

Greenfield operations and new businesses

Optimissa’s partners are used to advise foreign and local companies on filing applications for regulatory licenses or for approval of new businesses and activities. Several members of the Optimissa Advisory Board worked formerly for different supervisory authorities (in banking, securities markets and insurance) and have plenty of experience in this field.

These consultancy services can include tasks such as elaborating the business plan, designing the relevant organisational charts to ensure segregation of duties as required by applicable regulation, or drafting the operational procedures and information technology infrastructure by functional area, in a time and cost efficient way. You can always contact us for further information.

FRTB Perspectives

The Fundamental Review of the Trading Book (FRTB) has a wide impact on major financial organisations. Necessitated by the regulatory failings in 2008 and beyond, the Basel Committee on Banking Supervision (BCBS) has since been continually compelling the financial industry to adopt more prudent regulatory risk and capital reporting practices.
Read more…

Summary of FRTB

Understanding MCRMR-2016

What Are The Likely Challenges and Business Areas Affected by MCRMR-2016?

How Can We Arrive At A Strategy For Your Organisation