A major European bank required an integrated trade monitoring system. Brickendon was brought into design and build a new system to replace the existing tactical system, which had been found to be unstable and unreliable. Alongside this project, the client requested a strategy proposal for a revised monitoring operating model. This model would alleviate control concerns and provide an efficient and meaningful way of sharing monitoring results with other stakeholders across the institution.
Client Challenges
The bank had many challenges to maintain a trading activity process which can monitor
and provide better results to the bank. These include:
The delivery date was brought forward without adequate planning following high
profile internal control failures,
The solution needed to comply with regulatory requirements in multiple jurisdictions,
There was complexity surrounding the book structure, legal entity & global reporting,
Trade booking involved multiple systems with different versions of trade workflows.
This required the monitoring systems to be aligned in order to arrive at comparable
control data.
Changing the existing operating model presented a significant organisational change
and buy-in from various areas was crucial for this to be accepted across the firm,
In creating the revised operating model there was a need for exception-based
reporting that would highlight unusual trading activity. This required extensive
industry knowledge and a detailed understanding of trader activity across asset
classes to be able to build rules that would remove false positives.
Brickendon Solution
Brickendon worked along with client to provide a better plan and strategy on the trading
activity to help the client . The work included:
In-depth assessment of project scope, definition and requirements for the new system
build and a detailed bottom-up project plan,
Establishing rapid milestones and tightly managing the project team to meet these,
Analysis of trade versioning across all front office systems to ensure consistent reporting
of trade activity,
Detailed research of industry rogue trading and market abuse cases was carried out,
coupled with thorough business analysis to arrive at meaningful monitoring reporting
and escalation points,
Clear communication with stakeholders so that the new operating model could be rolled
out with buy-in from all areas, including the front office, operational risk and
compliance.
Client Benefits
The benefits realised by the change implemented by the Brickendon team achieved all the outcomes
defined at the outset. These included:
The project was delivered on time, on budget and without a reduction in scope. Serious control failures were rectified, and the new system was endorsed by internal audit and
operational risk, Differing regulatory requirements were addressed
(FSA and BaFin) within a single framework. The system significantly improved the transparency
of trading activity. The new operating model vastly increased the level
of accountability for the monitoring function. The redesigned reporting workflow included clearly
defined escalation procedures.