Regulatory Change

European Wholesale Bank

Design and Execution of a FRTB Review and Financial Markets Target Operating Model programme

Our client, a major bank, had developed a Target Operating Model (TOM) that demonstrated the business benefits of creating a modern, holistic pricing architecture capable of working effectively across the bank and, specifically, within the financial markets. However, the TOM required a clear and quantifiable business case in order to secure funding and support from senior stakeholders, a roadmap design for prioritising initiatives, and a set of Key Performance Indicators (KPIs) to track progress. ::projective kick-started the programme to quickly get it up and running, with a focus on how the new pricing architecture could more closely align front office activity and capital planning, support the bank in assessing the strategic impact of the new capital framework, and improve the quality of data submitted to regulators.

What did we do?

Working alongside the bank’s Global Risk and Value chain functions, ::projective put together indicative cost, resource structure and timelines for the TOM programme implementation. We compiled and validated a detailed benefits case with stakeholders to justify the TOM’s implementation, plus identify the quantitative and qualitative benefits it would deliver, and established a steering committee focused on mobilisation and commitment for resources. We created a detailed roadmap to implement the TOM over a three  year period and outlined the key dependencies and priorities across the key dimensions of Data, IT architecture, Governance, Modelling, Risk Management, Finance, Test Execution, Environments and Resourcing. Working directly with dedicated roles we also effectively interpreted and translated FRTB regulation, bringing it to life for each asset classes’ specific requirements for both standardized and advanced approaches. We also created and maintained a process for the complete traceability of all regulatory documents, internal decision forums and industry papers, plus business requirements, functional specifications and testing.

What we delivered?

Momentum and energy to the programme from the start, thanks to our planning and design work, dedicated programme resources were able to add value from day one

Provide cohesive approach, universal buy-in, effective communication channels from the leadership team, and a comprehensive roadmap for the successful implementation of the TOM with a key metrics framework for tracking progress

Business benefits

True holistic view of conducted risk across the bank

Multi-millions cost reductions within cost-pressured environment

Clear understanding of business impact of the new capital framework to maximise competitive advantage