Client background 

Our client was a global interdealer broker.

The challenge 

The client required a rapid and thorough Risk and Controls Self-Assessment (RCSA) to be conducted for their UK regulated entities and related global branches, with a focus on the front office broking activities. The client had previously conducted RCSAs at the entity level and now required a detailed assessment of the status of each business activity aligned to groups of brokerage desks across a diverse set of businesses.

Our approach and contribution 

Working in close partnership with the firm‘s risk department and front office management we:

• Provided a small team of highly skilled consultants to work alongside the client’s own staff to deliver the assessments for two UK entities, including the activities in four foreign branches.

• Actively managed the RCSA project delivery of 28 RCSAs covering all aspects of the front office brokerage activity, tracking progress through regular reporting to, and engagement of the client sponsors and stakeholders.

• Reviewed and enhanced the firm’s existing risk taxonomy to reflect a more detailed business activity and desk level, including setting the initial inherent risks. 

• Mapped and aligned the risk taxonomy to different types of brokerage activity by considering the execution protocols and business approach for each group of desks.

• Reviewed the firm’s previous assessment and process documentation to extract an initial set of controls mapped to the identified risks, creating templates for each required RCSA.

• Interviewed risk champions responsible for each of the 28 RCSAs to refine the relevant risks and revise the controls in use by each area and produced an initial draft RCSA for review.

• Conducted a challenge interview with each business area to refine the RCSAs, assess the residual risks and identify controls improvements.

• Summarised the outcomes for the Risk Committees and Boards of each entity, including a recommended set of actions to further reduce and optimise residual risks.

The outcome 

As a result of our engagement:

• The legal entity Boards were provided with a comprehensive overview of the risk profile at a granular business activity level: the risks within the business, the controls deployed and the opportunities for improvements, enabling a plan for remediation.

• The project delivered a comprehensive, repeatable, front office RCSA framework and approach enabling the firm to manage on-going self-assessments without external assistance.