Success Stories: Finance, Risk and Compliance

When financial services institutions come to us with their challenges, they expect us to cut through complexity and add genuine value. We respond with effective solutions delivered by financial services professionals who are distinguished experts in their fields. Our clients recognize and value the Capco difference – front-line experience, distinctive insights, and a total commitment to success.

Case 01

European Banking Client

Capco helps European Banking client with replacement of reporting software and preparation for outsourcing

The client wanted to replace their regulatory reporting software. Capco recommended BAIS from BSM - our preferred partner for regulatory reporting software (especially for outsourcing projects). In addition, our client planned to outsource their regulatory reporting tasks to Capco. As a result, considerable detailed preparation was required, to ensure future processes would be carried out accurately.

Confronting challenges
First, we created a questionnaire to verify which reporting requirements were relevant to our client, the technical environment they were working in, and their precise goals and requirements for the outsourcing of their regulatory reporting functions.

Our client had a lot of processes in place for regulatory reporting that were still done manually. In order to outsource these processes successfully, automation (of most of the work involved) was essential.

One of our key tasks was to understand the complete set of regulatory reports – as they applied across the whole company and its subsidiaries - in order to be in the optimum situation to initiate outsourcing.

The physical transformation from the previous regulatory reporting infrastructure and data center provided by our partner Deutsche Börse AG. The Deutsche Börse web-based user interface, in combination with Capco´s unique internal control system, offers a powerful holistic overview of regulatory filings and underlying data, enabling the user to perform various types of analysis to ensure that regulatory filings are correct.

Key benefits

  • Cutting edge capability. The new regulatory reporting software is stateof- the-art within its market and fully replaces the previous software, which was technically outmoded.
  • Business intelligence. Improvements to the regulatory reporting process provide benefits from a business as well as a compliance perspective.
  • Future proofing. The new approach provides assurance of regulatory reporting compliance in the future as well as today.
Case 02

Foreign-owned Commercial Bank

Capco helps foreign-owned bank build flexible IFRS reporting framework

This commercial bank provides financial services to individuals, small businesses, middle-market companies and major corporations. As a wholly owned subsidiary, the bank operates in four states and two international locations.

Confronting Challenges
To meet the reporting requirements of its foreign-owned parent, the bank needed to adopt International Financial Reporting Standards ahead of schedule. Doing so required building dual reporting capabilities within a flexible framework that could support J-GAAP (Japan’s accounting standards), U.S. GAAP rules and IFRS reporting needs as well as an accounting policy environment leveraging Hyperion’s financial management system.

The client engaged Capco to focus on project management office (PMO)/governance, organizational change management and systems integration.

To develop a target operating model, we conducted interviews and documented reviews of current-state vendors, applications, systems, data flows and architecture. We developed “blueprint” documents that included system, vendor and data analyses. We developed standardized project reporting and scope control procedures to enhance the bank’s existing governance program.

Our PMO work concentrated on developing a detailed project plan and budget, resource mobilization, and project management tools.

In addition, we conducted interviews and surveys to assess the client’s change readiness environment and developed an organizational change management plan that focused on vision and stakeholder alignment, training and communications.

Key Benefits

  • Predictability around IFRS implementation effort, including required scheduling, budget and internal/external resourcing needs
  • Flexible and scalable governance plan
  • Targeted organizational change plan that supports transparency in implementation
Case 03

Global Quantitative Equity Investment Manager in the SEC Crosshairs

Global quantitative investment management firm seeks help assessing compliance-related controls

Our U.S.-based client manages global strategies for institutional investors in North America, Europe and Pan Asia.

Confronting Challenges
Subsequent to a coding error that the firm had discovered in its quantitative investment process, the Securities and Exchange Commission (SEC) conducted an investigation that resulted in a settled administrative proceeding brought against the firm that translated in compensation payments, fines and the requirement to appoint an Independent Compliance Consultant (ICC).

Following a competitive process, Capco was selected as the ICC to conduct a comprehensive review of the relevant supervisory, compliance, and other policies and procedures designed to detect and prevent breaches of fiduciary duty, breaches of Code of Ethics or violations of federal securities laws.

During the review, we examined thousands of documents, conducted dozens of interviews and engaged with all senior members of the company. Specific areas of focus included research, modeling, portfolio management, trading, risk management, compliance, legal, operations, client services, disclosures and valuations.

At the end of this engagement, we provided the client with a comprehensive report to the SEC and their board of directors that we may be called upon to defend.

Key Benefits

  • Ensure compliance with SEC order
  • Provide a firmwide qualitative risk and control assessment with recommendations to help the client better align with industry-leading practices
  • Rebuild investor trust as new controls and related policies and procedures are put in place
Finance, Risk & Compliance