Background:

The engagement involved supporting the bank’s credit risk management team, i.e. first line of defence, for end-to-end wholesale risk management, covering all products, regions and lines of business across wholesale lending.

Opportunity:

The G-SIB launched a multiyear, large-scale credit risk transformation and remediation programme across its functions after it was issued a consent order citing concerns with regard to risk management, data governance and internal controls. The bank required immediate advisory as well as execution support for the programme, with quick onboarding of credit and lending subject matter experts (SMEs) as well as setting up of a large execution team across various credit risk management functions. 

Solutions:

CRISIL created a sweeping plan for the client to ensure coverage across the entire credit risk and lending spectrum, comprising credit risk assessment, transaction management, loan operations, portfolio monitoring, including early warning systems, regulatory reporting, and controls. This was followed by co-developing a deployment and execution schema for those areas in collaboration with the senior management of the bank. Notables here included:

• Adhering to stringent timelines by deploying a team of 250+ programme managers, SMEs, senior analysts and analysts in the US, the UK, India and Singapore in 4 months

• Aligning the operating model with business requirements through a robust onshore/offshore resource mix, as well as engagement modes, including advisory services and managed delivery, and build, operate and transfer operating models

• Partnering with the bank’s procurement, sourcing, business and finance teams to ensure rapid and optimal onboarding implementation 
  

Key CRISIL deliverables across functions included:

• Corporate and transaction banking: Accelerated the loan processing agenda by supporting the setting up of a transaction management team. CRISIL also supported end-to-end execution, including booking, closing and servicing, as well as associated controls, to ensure the team reached steady state within the agreed timelines
• Credit risk and controls:
  • Assisted in designing a monitoring framework and performed operational and analytical tasks for early warning indicators
  • Set up and executed the quality assurance function for the wholesale credit risk division for first as well as second line of defence
  • Provided support to clear a backlog of 1,000+ credit reviews of the European division across investment grade and high yield bond, leveraged lending and municipal bond portfolios within 2 months
    
• Regulatory reporting: Managed the regulatory remediation programme by cleaning data of 30,000+ facilities within a year to support Shared National Credit and FRY14-M/Q/A reporting
  

Impact:

• The bank received regulatory nod post material strengthening of its credit risk infrastructure
• Meeting its sustainability targets with complete accuracy in 95% of its facilities in scope for regulatory reporting with regard to loan data
• Reduced credit review backlog of the European division by 70%
  

To learn more, contact us at: Contact.CLS@crisil.com

Questions

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