A small European Bank's Risk Management area was dysfunctional.

We proposed a New Product Approval process that gave the risk manager a more appropriate authority level.The parent Bank's confidence was regained which then resulted in the subsidiary being allowed to continue trading.

Working closely with the Head of Capital Markets in London , a strategy to modernise the style of trading in Europe was proposed and agreed.- Concentration on value-added products as against high volume products enabled the bank to preserve revenues, whilst reducing risk and freeing capital for use in other operations.

Our client had two financial control and operations units and needed to integrate them.

An interim Finance Director was provided to the firm. His brief was to maintain financial and operational control and keep the staff involved and motivated, knowing that many of them would not be required in the new slimmer organization. At the end of the project, the infrastructure was better equipped to provide the service required by the business and at a much lower cost.

Our client's derivative businesses were unprofitable, with a high cost base, excessively volatile revenues and no channel of distribution to the private bank.

We advised and managed project to integrate the derivative business into one umbrella organization, reducing cost base by over 40%. We developed multi-asset class structured products including credit linked notes and guaranteed fund of funds. The bank boosted its delivery channels including global customisation on a global basis.

Our client had an accounting system that was not adequate for its complex, high-volume equity trading and needed to choose between upgrading the existing system or replacing it completely.

A review of the software market showed that no existing system could process the expected volume and it was decided to develop the system from scratch. The successful outcome was a high-volume, rules-based system that connected to, but was independent of, our client's other systems.

A bank's risk management work programme was becoming overly ambitious.

Recommended and then developed a requirements specification for phased improvements to their market risk management systems. We used scenario planning to identify, measure, and strengthen core competencies.

The client had recently converted its Treasury from a passive funding role into a pro-active profit centre. Its Risk Management department was concerned that the Treasury did not have risk management techniques or capabilities in place to support such a trading role.

We examined the client's existing Risk Management capability through a review of its processes and through interviews with key senior management in the Society. We then designed a Risk Management Framework for use by both Front Office and Risk Management in assessing individual and portfolio risks. We also recommended instruments that would enable the Society to reduce its risk profile, whilst allowing the Treasury to expand its trading activities, and templated this process for repeated use.

Client needed to diversify portfolios with equities and fixed income instruments.

Developed theoretical and empirical models that evaluated the extent to which eight different commodities would be likely to provide diversification in a global portfolio. The key findings related to the business cycle as the key driver for dynamic allocations.

The bank's MIS was not able to measure profit and loss by business unit, including full cost allocations and capital usage.

Designed a reporting system using existing data to report a full cost daily P&L by business unit. This was used to measure return on capital and performance against budget. A key feature of the system was the ability to allocate costs to the business activity driving these costs. This gave management a variety of information with which to assess the contribution of each business unit and drive through strategic changes.

Misalignment between business strategy and allocation of risk capital.

This assignment encompassed strategic alignment of the board's vision of the businesses and the activities of the risk management division. Advocacy of change in the management structure, processes and business mix.

A major Japanese audit firm wished to advise its clients on “state of the art” risk management”, strategy, structure, process and analytics.

This Prime Broker's core business was trading equities and derivatives with Hedge Funds. Our client was concerned (after LTCM) that its systems were not sufficient to forecast collapses of major hedge funds and asked for robust stress testing to 6SD shocks.

Designed analytical system to determine the optimal level of capital (default fund), margining (secured lending) and loan pricing. Advised on “market segmenting” the funds and conducting stress testing to ensure that the collapse of a major hedge fund could be absorbed by the margins and default fund and not risk insolvency.

Bank needed to bolster its risk controls and management as it implemented its new strategy.

Advised on restructuring books; developing optimal inventory management systems of retail flows and providing detailed analytics for assessing franchise value.

Traders were overburdened with executing low margin business flow and needed a smarter risk focus on bigger ticket items.

Designed a component-based architecture which would absorb small trades into an automated netting system using a rules engine. The rules were designed to be “simple” – say size – or “complex”, to absorb contingent or path dependent trades. Large ticket items or complex trades were redirected to the trading desks for execution. The ECN increased efficiency, reduced risk and gave our client a commercial opportunity, as it could be provided to our client's alliance partners on a ‘white labelling'basis.

We suggested that they improve their credit rating by focusing on the key performance indicators that are commonly used to rate airlines. Indeed, 18 months later, the credit rating has been improved and borrowing rates reduced.

A global broker, with a controversial track-record had identified financial irregularities in three of its subsidiaries

A rapidly growing Hedge Fund had started to offer its clients the possibility of investing in its USD products via other currencies. It lacked a robust process for ensuring that resulting foreign exchange risk was correctly hedged and the price to the client for such a hedge was reasonable.

As well as lacking adequate control processes, we identified that the client also was inexperienced in managing FX risk. Together with a new control mechanism and associated documentation, we delivered an education programme. This three -pronged approach enabled the firm to neutralise any FX exposure and ensured that its chosen counterparty was pricing the transaction correctly.

The Client had a plethora of spreadsheets for reporting its operational performance. As a consequence, the information supplied was late, costly and lacked analytical capability.

Working with a software partner, we assessed the Client's current state and needs. We rapidly delivered a prototype of the full implementation model. From the Prototype alone the Client learnt several important lessons about pricing structures, its efficiency and, hence, profitability.

The firm wanted to establish optimal channels for servicing clients in enterprise risk management.

Designed a holistic cross-selling approach that integrated seemingly disparate business divisions. This enabled an interdisciplinary approach to risk management to be delivered, covering the complex areas of SPV's, CBO's, complex derivatives & securitization. The approach had sufficient depth to properly evaluate risk exposure on an ex ante basis.

Having entered a joint venture with a software house to develop an equities Electronic Crossing Network, our client needed a financial control and operational infrastructure in the process of obtaining FSA regulatory approval.

A simple accounting and reporting system was designed to allow appropriate reporting of the project as it progressed and the FSA application was successfully submitted.

An LSE-listed firm had adopted Turnbull reporting in its risk management process - at some cost- but they were unable to obtain benefits beyond satisfying LSE regulations.

Using our advice to identify and then fill a major gap in the methodology adopted, the firm used its new system to achieve a step-change in its cost effectiveness.

The divisions of a large US industrial firm had considerable autonomy. As a result a parts supplier was able to re-sell parts bought from one division back to our client. The supplier went out of business without paying for parts received and not delivering parts that they had been paid for.

The client's planning framework was not capable of successfully delivering multiple work programmes in a highly complex business.

The client had a Programme that was two years behind schedule.

On our recommendation, Operational and Programme work elements were separated.  These clear lines of responsibility highlighted key differences in management and staff expectations. Having established a Programme Office, the Risk Management area identified scheduling gaps due to planning flaws.  The extent of success was reflected in the overwhelming acceptance of the revised schedules and early completion of the Programme.

Our client had been successful selling a front office derivatives software product. This was reaching the end of its useful life and it needed to diversify its product base in order to continue to grow.

Assessed a number of strategy options and then drew up business plans to implement the chosen strategy.

A successful commodity trading company had changed its business strategy, taking it from pure trading into a capital intensive manufacturing company. As a result it found itself short of working capital

Our brief was to examine the way in which management was approaching the market to obtain finance and to recommend an alternative. We used modelling techniques to assess the type of finance required and consulted our network to understand the type of finance which might be available. As a result of our work, the company had a better idea of what was required from a financial perspective and felt able to go out and obtain the funding required

A mid-sized European mining concern had been inconsistently applying risk management criteria in approving new products.

We identified an imperceptible shift of business to less well managed divisions. Armed with this evidence we were invited to advise on the acquisition of a company in the US . We helped to revise terms of the deal and achieve a substantially better outcome for the new European owners.

A small German firm had received an offer of finance from a Venture Capitalist.

Having thoroughly re-worked their risk management process, the revised Business Plan convinced the VC to offer a much better deal to our Client.

Our client had recently lost its Finance Director. Problems were compounded because the Finance department was not equipped to give adequate support to our client's equity derivatives business.

Supplied Interim Finance Director who took immediate control of the Finance Department. Instigated project to re-engineer our client's equity derivatives business. By conducting extensive interviews and examining existing information found a number of significant control weaknesses. Changes needed to address the weaknesses were identified and material cost savings achieved. Using a roadmap to implement a series of recommendations enabled our client to make a step-change in volumes processed with no increase in staff.

The parent bank had obtained a banking licence to operate a banking subsidiary in the Czech Republic and needed a Financial Control and Operations infrastructure.

The whole of the infrastructure was developed for the bank to be able to commence operating. Particularly successful as the bank grew significantly faster than had been planned based on the original infrastructure.