By Declan Flood, Senior Consultant

A hard Brexit after March 2019 will expose banks to the possibility of a ‘no passporting’ rule, meaning they will no longer be able to access European markets. This loss of market access represents a major threat to business continuity and banks must act now to mitigate the effects.

Migration is an enormous challenge of unprecedented scale, complexity of change and must be in place within a very tight timeframe. Banks that operate in the UK may choose a strategy to ensure readiness by establishing European subsidiaries or migrating their business to a non-UK legal entity. This requires multiple steps, starting with a client segmentation process to identify which clients will need to move, followed by legal re-papering and significant ongoing client engagement to retain clients’ confidence. The final phase is a series of client migrations from one jurisdiction to another.

Due to the scale involved, client migrations are likely to occur in daily tranches over a period of months. Each one requires coordination between off-boarding, on-boarding and other globally dispersed teams, as they execute the few hundred individual tasks required in each tranche.

The coordination is a significant communication challenge, aggravated by the large number of participants who may not be co-located, but must be tightly coordinated. The activities of all these participants should be carefully orchestrated to ensure client accounts are left in a safe state at the close of business each day. At stake? These accounts might not be left in a secure position, which can potentially leave clients exposed to market risk and impact their overall portfolios.

Typically, this orchestration challenge is tackled by establishing ‘war rooms’ to track the start and stop of the activities required through phone calls, emails and updating online spreadsheets. This approach is simply not scalable. It’s resource intensive, requiring a small team to run 24-7. Furthermore, the lack of a readily accessible global view shared with all participants means teams are left unclear on the current status of the migration as a whole and where additional effort or escalation is required. Moreover, access to spreadsheets requires care and control so users do not overwrite each other’s entries.

We’ve developed a Runbook Tracking Module (RTM) to orchestrate these activities. The RTM is used with a range of clients and is an element of Capco’s CANVAS suite of web hosted applications.

The RTM visualizes the E2E plan across business, technology and operations teams, including any backout steps, in case of a no-go decision, which allows managers the opportunity to quality assure the proposed plan and sequence. Users upload a runbook of tasks, dependencies and go/no-go calls prior to execution through a simple Excel template. This can be done in a single load for the entire runbook plan, or the RTM can support a federated model by merging plans from each team responsible for their own element of the migration.

The RTM adds value by allowing real-time progress tracking. During execution, participants login to update the status of their activities by clicking on ‘started’, ‘completed’ or ‘failed’ buttons. These updates are propagated to all users in real-time as visual updates and also users can subscribe to email and text message notifications of changes to critical activities of interest. Managers may view the RTM’s in-built progress reports to identify overdue tasks and their accountable owners. This transparency, and the contact details of alternates and escalations points of contact which are stored in the RTM, allow managers to drive the migration forward and, possessing all information, make data-driven go/no-go decisions during the migration.

The RTM also records hard data on the actual start and stop times of all activities in the plan. This comprehensive audit log can be exported post-dress rehearsals, or after each execution tranche, to allow decision-making on how processes may be improved.

The RTM is already in use to effectively support our clients’ migrations and we firmly believe it has a role to play in Brexit readiness.

For more information about how we can help UK and EU-based clearing businesses in the run up to Brexit, please get in touch:

STEVEN HARGREAVES
Partner (London) steven.hargreaves@capco.com

RACHAEL ZUCKERMAN
Partner (London) rachael.zukerman@capco.com