Nicolas Renard October 12, 2020

End-to-end RCSA for a European financial institution

Our client, a recognised European financial institution, is active in Wealth Management and Investment Banking, with operations across several countries.
They needed an updated view on their key operational risks, through execution of a bank-wide Risk and Control Self Assessment (RCSA). In addition, they also wanted to verify that risks above their risk appetite would be addressed through the review of existing controls, or thanks to the definition and implementation of appropriate action plans to reinforce their control environment.

Challenges

Our client was facing the following challenges:
- strong regulatory scrutiny, with the need to address a recommendation from the European Central Bank within a short timeframe
- an incomplete view on its end-to-end business processes, with numerous activities organised in silos
- a lack of internal capacity to handle such a large exercise at firm-level
- an incident-driven operational risk management department which, even if it had been sufficient up to then due to the very specific business model of our client, needed a change towards a more forward-looking identification of risks, in light of the evolving business environment and our client's current and upcoming challenges

Our solution

After a high-level requirements analysis workshop teaming up with the Operational Risk Management team, the Chapelle team (made up of 4 risk experts) delivered a pragmatic approach, proportionate to the client's environment, built on following building blocks:
- proof of concept on the most material activities of the organisation to fine-tune the approach and deliver quick yet detailed results on their operational risk profile, to gain buy-in of the senior management
- step-by-step methodology, to facilitate its understanding by all stakeholders across all the 3 lines, and ensure comparability of outputs, regardless of workshop facilitators, participants or countries
- process-based approach with RCSA workshops, involving participants from various departments across 4 different countries, exchanging and discussing the risks threatening their business objectives
- coaching of the Operational Risk Management team by Chapelle experts through RCSA workshops facilitated in tandem, to enable a smooth and empowering involvement, facilitating our client's internalisation of skills
- leveraging RCSA workshops to increase operational risk awareness through positive and jargon-free risk management guidance and to improve collaboration between lines of defense, across departments and teams

Key benefits

This RCSA project addressed the initial challenges of the client, through value added at different levels:
- a consolidated view on the operational risk profile of each of the departments, allowing comparability and deeper analysis for risk concentration and common root causes, and a way to prioritise mitigating actions based on the assessed residual risks
- an upskilling of the Operational Risk Management team, giving them an increased internal visibility and added value for the business, fostering a better collaboration across the organisation, and the ability to carry on the work autonomously
- an improvement of the client's risk culture across the 3 lines, through risk management made more tangible and proactive, as an enabler of business performance