Financial institutions are facing unprecedented challenges to restore their margins and return on equity in a constantly evolving regulatory and competitive landscape.

 

We partner with CFOs and CROs to define the best strategies for the effective management of capital, balance sheets and liquidity. We help our clients anticipate and implement new regulations into your day-to-day operations in a way that helps you grow. 

 

Risk and Finance transformation

The role of the Risk and Finance department has grown.  Greater need for governance and production control have led them to need to increase their depth of analysis, develop shared platforms for production processes and partner with others more actively.

 

We help our clients:

 

  • Revise Risk & Finance departments’ mission statement
  • Adapt organizational competences to the new regulatory and business realities
  • Identify synergies to increase the effectiveness of the organization

 

Example of recent work:

 

Building a pan-European finance hub

 

Our client, a global leader in corporate and investment banking, wished to develop a new finance hub based in Madrid covering twenty of its European markets and optimizing existing resources to expand its operational scope. Our client was challenged with existing diverse legacy processes and variable client service quality across the region. The CH&Co team produced an extensive analysis of the platform as it was and mapped the current workflows. We then designed a target operating model based on the operational performance levers we had identified. As the change management project was implemented, our consultants continued to provide ongoing counsel to ensure that the initiative ran to plan.

Performance & value-based management

We support our clients in framing how you measure and monitor performance and value creation.

 

We help our clients with:

 

  • Integration of risk-adjusted performance metrics across the organization
  • Analysis of cost and revenue drivers to build optimization strategies
  • Integration and adaptation of the management reporting set-up to new technologies

Risk management & control

We help Risk and Finance departments assess and mitigate risk.

 

Our areas of expertise include:

 

  • Alignment of risk appetite and resource allocation to target returns on equity
  • Assessment of the impact of new regulations on the measurement of risk
  • Implementation of risk metrics into day-to-day operations
  • Building of robust and integrated internal control frameworks and escalation processes

 

Examples of recent work:

 

Designing a proprietary regulatory risk model

 

One of the last major banks not to be compliant with the internal ratings-based approach of Basel III asked CH&Co to design, build and implement proprietary risk models that would include and accommodate the latest methodologies and regulatory expectations. 

 

To accurately measure the level of the bank’s credit risk, the CH&Co team accessed the bank’s regulatory capital consumption, as well as key financial data, including the cost of risk and IFRS reserve. The resulting models allowed the bank to anticipate risk scenarios and changes in its risk profile. Our CH&Co quantitative modeling team then applied various statistical techniques to ensure the sustainability and robustness of the implemented models.

 

Comprehensive Capital Analysis and Review

 

As part of the Comprehensive Capital Analysis & Review regulation, a Tier 1 US Investment Bank had to develop quantitative models to produce baseline and stress test projections, conduct capital adequacy analytics, ensure FED compliance with capital planning processes and produce specific regulatory reporting (FRY-14A/Q reports). CH&Co supported our client by analyzing the Fed scenarios and developing proprietary macro variables, forecasting balances of a 9-quarter horizon, developing credit loss models and portfolio specific models, performing projections and calculating PPNR, net income, capital ratios, RWA, etc., preparing Fed reports and capital planning documentation for submission, as well as defining governance and roles and responsibilities for validation models, controls and oversight of the capital plan. The output led to the creation of a single data platform to source, transform, aggregate and report data, which helped in ensuring the client’s risk management capabilities across the organization to support a risk conscious capital planning process and integrate CCAR into a long-term initiative by allowing these processes to become repeatable, auditable and robust.

Resource management

We partner with clients to make the shift towards a more resource-driven business model that optimizes shareholder value and client satisfaction.  We help you develop resource allocation governance and strategies and access capital and diversified sources of funding.

 

We provide the following resource management support:

 

  •  Development of new organizations to trade actively scarce resources (funding, CVA/LVA, collateral)
  • Adaptation to new regulatory requirements and market practices for the valuation of assets and liabilities
  • Compliance with new capital requirements and optimization of capital usage

 

Examples of recent work:

 

 IHC & BCBS 239 - Data Governance

 

To cover all the data topics related to the establishment of an Intermediate Holding Company (IHC) over its U.S. subsidiaries and in response to the local implementation of the BCBS-239 regulation in the US, CH&Co assisted a French Corporate and Investment Bank set up a Data Governance approach across its North American platform. The objective was to ensure compliance with the regulations in terms of reporting, capital, liquidity and risk data requirements, implement effective ownership, improve quality monitoring and data access, and define the Chief Data Officer function.

 

Resolution Planning

 

A major corporate and investment bank needed extensive project management services to complete its 2014 filing within the context of the Resolution Planning requirements of the Dodd Frank Act. The CH&Co team managed the response to the new Guidance provided by the Regulators (FED& FDIC), defined the response strategies for early and extended filing deadlines (July 1st vs October 1st), organized and coordinated large and diverse teams across departments, multiple locations, subsidiaries and affiliates, monitored progress made and ensured the timely and qualitative completion of the requirements formulated by the FED and FDIC.

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