Use Cases
Regulation
MiFID II compliance
A tier 1 US investment bank engaged us to assess the gap between the requirements of MiFID II for Microstructure Issues versus the current state capability and functionality of it’s FX, Rates and Credit technology stacks.
The outputs of the engagement consisted of:
• Inventory of FRC algorithmic trading systems
• System flow diagrams with overlaid algorithmic controls
• Gap analysis for impacted components highlighting gap to compliance
• Findings report detailing degree of duplicated functionality, controls distribution and technical fragmentation
• Strategic design options report with high-level delivery proposal
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MiFID II Investor Protection - Costs & Charges disclosure
A tier 1 German investment bank hired us to deliver its clients cost and charges disclosure under MiFID II Investor Protection, covering the IB, Corporate Finance and the retail Businesses, across all asset classes.
Having interpreted the regulation and the compliance timeframe with the Legal teams, we agreed the definition of cost with the Businesses involved, articulated the corresponding Business requirements and managed the delivery of both the generic ex-ante disclosure solution and the yearly ex-post disclosure implementations, working closely with the Technology teams.
Our detailed understanding of OTC transactions lifecycle and typical valuations engines limitations allowed us to produce a set of extended and insightful requirements, pre-empting solution design flaws and mitigating the associated risks through a series of controls.
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Basel III “Too Big To Fail” subsidiarisation strategy
The G20 issued global standards to improve financial stability and avoid future bailout of Systematically Important Financial Institutions, known as Too Big To Fail (TBTF) or Living Wills Initiatives.
We were engaged by a Tier 1 Swiss bank to form strategy around subsidiarisation of the group's Global Asset Liability Management Business to respond to the regulatory requirement. It was critical to allow the client to continue providing competitive liability management services to the IB, WM and Banking Book Businesses across all global entities whilst meeting regulatory requirement and aligning to Application Simplification programs where possible.
Industry-wide development: IBOR replacement
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We are currently engaged at a Tier 1 investment bank with the task to bring new products referencing Alternative Reference Rates to market, in order to help the Corporate and Investment Banking division achieving a competitive advantage over it's peers.
Initially focused on bringing ESTER products such as swaps to market, predominantly for funding purposes, as well as RFR bond issuance and secondary trading.
The key areas of focus for us in the early stages of the project are:
1. to define the new products priorities and the strategy for bringing these to market,
2. to define, plan and manage the infrastructure and process changes required to deliver the strategy and
3. to define the subsequent migration strategy for the legacy transactions to the new products framework, across the FRC & Equities Businesses, per product (market making and hedging), client and legal agreement.
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Strategic Initiatives
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Business Restructuring: Core versus Non-Core Implementation
As a result of stricter capital requirements, a tier 1 UK bank needed to devise a strategy to reduce its Core Businesses capital consumption. We were engaged to separate its core Business activities from those which were deemed to be non-core.
Our consultants worked with the client to define an approach that would reduce the Core balance sheet by £12bn RWA. We subsequently provided global front-to-back programme management to deliver a new division and a successful segregation of the non-core Businesses.
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Post Acquisition TOM development & integration with cross-border legal Business transfer
Post acquisition, a leading UK investment bank hired us to assist in defining the TOM for the Rates, Options, Hybrid, Exotics & MTN arm of the Business it had acquired.
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We were subsequently engaged to integrate the new Business using the defined TOM into the existing technology stack. A legal cross-border Business transfer was also required for which we provided subject matter and project management expertise. Capturing the front-to-back trade status of the transferring Business and delivering a complex transfer of £15bn of assets. This involved FSMA Part 7 arrangements, FSA VaR Waiver applications and execution of multiple migration events.
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Cost Efficiency
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System Integration: FRC Trading & Lifecycle management - Murex Replatforming
A tier 1 global bank, had embarked on a multi-year Application Simplification programme to achieve cost efficiency through consolidating its FX, Rates & Credit legacy trading system stacks onto a target Murex platform. We were brought in part way through the programme after unforeseen delays had already impacted the delivery timeline. Our remit was to assist with programme planning, project management, business analysis, quality assurance and testing.
We were considered ahead of existing SI and vendor resources due to our track record of successful delivery.
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IT App Cost reduction: Business usage versus TCO allocation analysis & remediation
An existing Tier 1 Swiss client needed to baseline the IT costs of its non-core Business and establish a program of change to drive down TCO.
We undertook forensic analysis, tracing the IT utilisation and dependencies of the Structured Credit & Rates Business, in order to understand their current TCO. We then mapped the trade maturities and profiles to identify the timeframe to be able to exit inefficient platforms; this allowed the non-core Business to plan unwind strategies for trades on costly systems, or migrate to more efficient platforms to achieve cost reduction.
Operational Risk
ORI identification & remediation strategy across IB systems & processes
Our client engaged us to undertake a F2B review of their current state trade lifecycle management platforms and processes supporting it’s Credit & Rates Businesses.
The output of the engagement consisted of:
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• an interactive system flow diagram outlining ORI’s identified through the IT stack,
• a catalogue of all ORI’s identified weighted against their potential impact with remediation recommendation,
• a report of all End User Applications identified through F2B function interviews, outlining the operational risk they carry and any retirement plan.