The Industry Compliance and Risk Management in Banking Part. II

By its nature, the private banking business is subject to strong ethical obligations in a restrictive regulatory environment. Private Banks were able to adapt their organizations accordingly by developing a "sector compliance" deployed across their different levels and geographic features. Compliance is also declines in their information system. The tools available to the front office are now configured so as to detect transactions revealed a risk of non-compliance. Still, the legislation varies from one country to another, even within Europe, and in fact complicates the adaptation of the SI in a pooling system.

In this way, private banks have managed to build a culture committed to compliance throughout their organization, regardless of the level of responsibility and activity of its players, with supporting concrete ways (eg dissemination of "best practices "developed in-house or in collaboration with other banks to better support the fight against money laundering, etc.). in addition to the rules dictated by the ethics implicit in the strict sense. Daily collaboration between asset managers and compliance officers or the training focused on the regulation is widely involved in the dissemination of such a culture. All this should help avoid service failures often related to communication problems on compliance.



Thus, the various stakeholders of a private bank involved in the efficiency of the public and particularly to locking the risks of business and reputation. The first stems from the use of instruments with increasingly complex and specific risks (hedge funds, credit derivatives, etc.)..

The Industry Compliance and Risk Management in Banking Part.I

In 2004, the Parmalat scandal has revealed a huge hole in the accounts of the group of food while a considerable amount of money was diverted to tax havens, splashing in passing several private banks. A

Like Enron in 2001, these scandals have led to a stricter financial regulation, arguing in particular for greater transparency and increased customer knowledge, like the last part of the Directive for the anti-money laundering entry into force in 2005.

Against a background of risk management, the recent regulations (Basel II ...) were, in general, translated contextually in the legal departments of banks declined by their directions operationally risk, internal control, checking the correct application. Beyond these functions, the consideration of operational risk under Basel regulation and more generally the risk of non-compliance requires a related but separate governance, namely the "compliance". Commonly translated by the term "compliance", it transcends and includes the current notion of "ethics", focusing on compliance with the rules of conduct within the organization and vis-à-vis third bank, and especially under legal limits. Specifically, the compliance ensures that the bank acts in accordance with its rules, the law, the Code of Conduct, as well as best practices to avoid irregularities in the functioning of the Institution, its organs and its staff [1]. Therefore, in an environment where ethics is rooted in the everyday life of private banks for decades, compliance developed in parallel or even supplants to occupy an ever more important.

Operational Efficiency Part.III

The combination of the two services is essential to ensure consistency in the development and daily management. Service levels associated with these two activities should be adapted to customer needs.
The provision of all services must be guaranteed by service agreements, reviewed regularly with key users. This will regulate the relationship with users and a corresponding reduction in the cost of the relationship.

Governance and management:
To ensure consistency of objectives from day to day developments, it is necessary to establish a unique control of the whole area of work operationally and in terms of its development (projects). The cells respond directly support the daily needs of internal customers will be directly connected to the same manager as the study of cell changes (service projects) and project management.
In addition to coordination facilitated the centralization of information on operational activity will also have indicators for monitoring the activity and complete advanced.
The establishment of centers contributing to the development of operational effectiveness of the organization

The division of operational efficiency can significantly increase the operational efficiency of any Bank by reducing the complexity of the process, facilitating the evolution of organizations, reducing the overall cost of the activity level of service or greater .
This structure also facilitates the response to the need for continuous development, ensuring consistency in its scope, and contributing directly to facilitate the work of projects and developments of its clients through its dedicated service and expertise.

For the pole reaches these goals, it will first identify the activities conducive to centralization of assets to add value and define the services 'operational' and 'projects' to enlist the broader scope of users. The identification, definition, implementation and establishing the trajectory of evolution of the cluster operational efficiency will require using an approach to take into account all the dimensions (budget, governance, expertise, information, human resources, IT ...).

Operational Efficiency Part.II

To effectively perform its duties, the division of operational efficiency will:

* Relate to activities for which it is possible to concentrate really three types of assets: the expertise, resources and information,
* Be resolutely turned towards the customers either returning customers or projects of development,
* Be provided with a governance and management processes adapted.

The assets of the division of operational efficiency:
The division of operational efficiency based on concentration of the three assets that are the information, expertise and resources. Only the structures to achieve the concentration of these three assets are likely to constitute the poles of operational efficiency in its own right.
Vis-à-vis the information, the cluster will have a role as manager, owner or centralized (broker). It will therefore have a good command of a large set of information and / or complex, which will provide added value to share with its customers.
Expertise is a real knowledge of the scope of activity, the scope of use of services by clients, information and resources. The center will draw a capacity to formulate policies and methods. The expertise is not limited to a number of FTEs, but is the understanding of complex issues and ability to assist clients on these issues.
Means include other material, application or human (ie production capacity). The division of operational efficiency in the service of internal customers: With the exception of centers dedicated to specific clients of the company (call center, help desk ...), customers of a center of operational effectiveness of internal customers: other branches and departments, subsidiaries ... In particular, the implementation in place of a center of operational efficiency can send new customers such as small entities who could not afford these services before.
The division makes sense in the long term added value to its customers. To achieve this goal, the division must identify:

* The services 'operational' to make available the various entities on a recurring basis,
* Services projects or support services for the integration of services (eg setting up new tables referential or new releases for the cluster reference, definition and implementation of accounting controls of a project up or disseminating data for the accounting ... pole).

Operational Efficiency Part.I

A center operational efficiency is an organizational structure in place to deliver a set of specialized services. These services are focused exclusively on a set of functions similar (same functional area) and common entire enterprise or multiple directions. The division of operational efficiency is also involved in coordinating and facilitating changes in the scope of activity which he is responsible.

The tasks incumbent upon it are of two kinds:

* Operational mission: delivering in-house or external services
o Shared: used by all clients (which requires a sufficient level of both standardization and adaptability to customer needs)
o Quality: ensuring a high level of service,
o Integrated: consistent with the possible developments and other services (same principles or standards, consistency of information ...).
* Strategic Missions: alignment with corporate goals
o In terms of scope of activity: operational manager for both the service and project management in the strategic field, defining the principles and standards of practice and evolution,
o In terms of process users of these services: the service of development projects for the integration of services,
o Financial issues: cost reduction in service level or above.

The establishment of centers of operational efficiency should facilitate the changes by developing flexibility in the organization. This distinguishes them from the pooling of services that do not necessarily generate earnings above the centralization of resources.
In terms of implementation, the creation of a center of operational effectiveness is not in the sharing of existing services but rather to develop an internal provider with a service offering clean.
Key features of the poles of operational efficiency