BOYDAK MANAGEMENT CONSULTING

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Mary Henderson
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1 BOYDAK MANAGEMENT CONSULTING Ordnung in die Risikolandschaft bringen Ein systematisches Vorgehensmodell Zürich, 7. Mai 2013

2 RISK RELATED DATA USED FOR MANY PURPOSES Risk related Data Risk Reporting Financial Reporting Business Steering & Controlling Compensation & Incentives Product Pricing Client Reporting 1

3 INCREASING AMBITION LEVEL Completeness Regulation Efficiency Accuracy & integrity Competitive pressure Adaptability Timeliness 2

4 REALITY LOOKS DIFFERENT Consolidated views Specific data management & reportings Risk Finance Controlling Compensation Pricing Client IT legacy landscape 3

5 AND LEADS TO VARIOUS ISSUES Consolidated views Completeness Specific data management & reportings Risk Finance Controlling Compensation Accuracy & Pricing Client Efficiency integrity Adaptability Timeliness IT legacy landscape 4

Finance Controlling Compensation Accuracy & Pricing

6 DRIVERS FOR CURRENT SITUATION Fast changing regulatory environment Unclear and inconsistent top-down priorities Different banking functions with unconnected purposes Organizational complexity Fragmented IT legacy landscape IT organization lagging behind in terms of required speed and adaptability 5

unconnected purposes Organizational complexity Fragmented IT legacy

7 SITUATION MAY BE IMPROVED BY SYSTEMATIC COMPLEXITY REDUCTION Requires good understanding of complexity drivers and causal relations Regulator Business Model Organization & process design Data Governance IT Landscape Influenceable complexity drivers 6

relations Regulator Business Model Organization & process

8 TOP-DOWN PERSPECTIVE REQUIRED In order not to get lost in details Strategic value creation Business processes Data landscape Business applications IT infrastructure Quelle: Process & IT Value Enhancer (PIVE) 7

processes Data landscape Business applications IT

9 EFFECTIVE INVOLVEMENT OF TOP MANAGEMENT NECESSARY Top management Have a comprehensive view on overall priorities Do not want to occupy themselves with details of risk data, reporting and IT issues Hence delegate responsibilities to middle management Do not understand the consequences of complexity created by the middle management Are frustrated due to negative feedback of the middle management concerning risk, reporting and IT questions Middle management Strong focus on own department and function Everything is regarded as important and special Many redundant data, reporting and IT requirements result from this approach Complexity and requirements are unnecessarily increased Insufficient completeness, consistency, adaptability, timeliness and costs lead to complaints 8

middle management concerning risk, reporting and IT questions Middle management Strong focus on own department and function Everything is regarded as important and special Many redundant data,

10 ONLY TOP MANAGEMENT MAY REDUCE COMPLEXITY TOP-DOWN 20% Commodity functions & processes 80% Specific functions Top Management Top Management Middle Management Middle Management 80% Commodity functions & processes 20% Specific functions 9

Management Top Management Middle Management Middle

11 SUCCESS FACTORS FOR TOP STAKEHOLDER INVOLVEMENT 1 Discuss challenges in the language of the top management 2 Discuss on a strategic level no immersions into operational details 3 Comprehensive translation required 10

12 WELL PROVEN BEST-PRACTICE APPROACH FOR STRUCTURED INVOLVEMENT OF KEY STAKEHOLDERS Top Management Relevant Building Blocks COO CFO CRO Structured Stakeholder Interviews Individual objectives & priorities Strategic classification of business landscape Meaningful translation into organizational, process and IT perspectives Reporting & information needs Organization & process design Data Governance Relevant heads of business units Assessment of management satisfaction IT Landscape 11

business landscape Meaningful translation into organizational, process and IT perspectives Reporting & information needs

13 EXAMPLE: ILLUSTRATION OF TOP-DOWN SEGMENTATION BY TOP EXECUTIVES ACCORDING TO DIFFERENT CRITERIA Product & Portfolio Management Transaction processing Securities MM & FX Payments Loans Trading & Mid Office Marketing & Sales Support Business unit 1 Business unit 2 Strategic importance Need for differentiation Business unit 3 Need for agility / flexibility Need for consolidated perspectives Business unit 4 12

Office Marketing & Sales Support Business unit 1 Business unit 2 Strategic importance Need for

14 SUMMARY Top-down approach required to escape from the vicious circle of historically grown complexity To give the necessary strategic guidance it is important to involve top stakeholders cross-functionally Stakeholders are highly interested in being involved as long as form and granularity are adequate Overall, expected benefits for a bank are usually quite significant Precise scoping of all relevant initiatives und investments Significantly improved efficiency of all data management and reporting activities Substantially increased business value due to improved completeness, consistency, adaptability and timeliness of information / data Increased agility and flexibility for future requirements 13

usually quite significant Precise scoping of all relevant initiatives und investments Significantly improved efficiency of all data management and reporting activities

15 KONTAKT Boydak Management Consulting AG Kantonsstrasse 56 CH-8807 Freienbach Phone: +41 (0) Fax: +41 (0) Internet:

Baldrige Core Values and Concepts Customer-Driven Excellence Visionary Leadership

Baldrige Core Values and Concepts These beliefs and behaviors are embedded in high-performing organizations. They are the foundation for integrating key performance and operational requirements within