Risk Services for Financial Services Industry

AML/CFT Services

We provide advice and remediation regarding Anti-Money Laundering and Counter-Terrorist Financing with a special focus on: 

• Assessment of AML/CFT policies, procedures and processes
• Assessment of AML/CFT Business Risk 
• Define and implement AML/CDD measures in the organization 
• Design the AML/CDD function and processes to handle the existing customers and new customers; 
• AML/CFT Technology Consulting e.g., transaction monitoring system design and rules selection, configuration and optimization; screening list management 
• AML/CFT Training

Basel

The Basel Committee on Banking Supervision released a near-final version of its new bank capital and liquidity standards in December 2010, and issued subsequent revisions in June 2011 and in January 2013 for the Liquidity Coverage Ratio (LCR). The measures, known as Basel III, are designed to make the banking system more resilient to shocks by strengthening regulation, supervision, risk management and transparency.

In assessing the impact of Basel III, individual banks will have to review the effect on their overall business strategy, cost structure and policy on shareholder returns. Banks’ funding strategy may change significantly because of new liquidity requirements and the potential effect of higher capital requirements on funding costs.

Institutions will need to examine the impact on particular business activities, particularly in investment banking, and to what extent increased costs may be passed on to clients. Cost structures may also undergo further changes, for example to remuneration.

Banks should also review their customer base to decide whether to focus on less capital-intensive, high-quality borrowers or riskier, high-margin assets. At the heart of these challenges is the return on capital banks target to meet shareholders’ expectations.

The impact of Basel III and other regulatory changes will span many businesses, functions and aspects of strategy. Deloitte offers a multi-dimensional, coordinated service designed to meet this challenge.

Business Intelligence Services & Assets Tracing

Concentrating on investigations into the background, financial affairs, affiliations and associations of entities and individuals, we obtain strategic background infor¬mation for our clients on potential and current business partners, customers, investors, competitors and new personnel.

We trace misappropriated assets and help our clients with recoveries. We draw upon the global resources of Deloitte where assets have been moved offshore.

Data Analytics

Like other companies, we can help our clients capture, manage and analyze their data – but Deloitte has the deep industry expertise, advanced analytics capability, and understanding of decision-makers’ roles to maximize its value, turning everyday information into useful and actionable insights.

Deloitte Forensic offers focused services for FSI embedded with data analytics to provide companies with comprehensive solutions to respond to increasing regulatory enforcement pressures and the sophisticated fraud threat landscape. These services help firms to protect their reputation, increase their effectiveness and efficiency, and harden themselves as a target for financial crimes. The overall goal is to lower the total cost of fraud and compliance by finding the optimal mix of operational and technology resources.

An effective fraud and compliance program involves significant complexity, and Deloitte has the tools and experience to add value. Suggested services include risk assessments, platform integrations, systems tuning, and building a reporting system of key KPIs to assist with management oversight.

Foreign Account Tax Compliance Act

We are helping our clients to analyze FATCA requirements and prepare detailed assessment of functional areas and systems which are impacted, with a focus on: 

• Identify the program management team and governance structure for implementation of required changes 
• Create the governance structure that will manage the risk across the organization and monitor compliance with the regulations
• Develop a communication plan for business units impacted 
• Conduct a risk assessment and gap analysis on existing compliance, operations and technology process and systems 
• Identify the program management team and governance structure 
• Document systems, data and processes impacted 
• Identify system enhancements and new required systems 
• Review of policies and procedures 
• Assist in development and execution of account remediation methodology (e.g., population identification, remediation plan and procedures) 
• Draft procedure manuals (i.e., account opening, due diligence, etc.) 
• Develop compliance monitoring requirements 
• Develop internal audit plans and procedures 
• Cost and budget assessment for FATCA implementation 
• Implementation of FATCA requirements (according to Final Regulations or relevant Intergovernmental Agreements) 
• Trainings

Financial Services Internal Audit

We can assist by making available the extensive in-depth knowledge of our global financial services expertise to Internal Audit teams. Our services can be tailored to client needs, including co-sourcing and out-sourcing internal audit services, reviewing Internal Audit effectiveness, and providing advice and training in respect of particular aspects of methodology or financial services subject matter.

Fraud Detection & Forensic Technology

We use the latest forensic techniques and specialized forensic technology solutions to identify suspicious trends and patterns in large quantities of data. This focuses subsequent investigation, fraud prevention programs and yields recommendations for clients’ control environments. Fraud detection tools can be built into existing systems for ongoing benefit.

Our Analytic & Forensic Technology professionals assist clients and their legal counsel collect, preserve and analyze large and disparate data to support or refute the facts and allegations of commercial investigations and complex litigation. We combine our forensic accounting and investigative skills with advanced computer labs and cutting-edge technology to offer innovative solutions to our clients’ complex legal problems.

Fraud Investigations

We investigate actions to the detriment of shareholders, conflicts of interest of management and employees, theft of funds and assets, procurement fraud and contractual misrepresentations. We are supported by our in-house data mining tools to sift through large client databases and specialized forensic technology to image and interrogate computers and peripherals for electronic documents such as emails and deleted files.

Our investigations envisage all types of banking, non- banking financial institutions, insurance and capital market frauds, both internal and external frauds.

Fraud Risk Assessment & Diagnostic

Directors and management have a fiduciary obligation and a corporate responsibility to take steps to deter, detect and prevent it. Our integrated approach to fraud control helps organizations to understand their susceptibility to fraud risk, identify high-risk fraud areas, and develop a fraud control plan to address areas of critical fraud risk, monitor the ongoing effectiveness of fraud risk mitigation, and respond to actual instances of fraud. We perform fraud risk assessments, advice on best practice for fraud risk management and the implementation of fraud detection and fraud prevention measures:

• Perform control and process reviews related to the management of fraud risk;
• Review of contracts and supporting documentation, review of internal procedures; 
• Interviews with key personnel from Accounting, Controlling or Procurement; 
• Review compliance with supervisory authority‘s regulations.

Insurance

With a combination of industry knowledge and insight with technical expertise, our Insurance practice can offer strategic advice and practical solutions. We can help you assess and enhance your operating model, create effective governance structures and realize efficiencies in processing and distribution.

We can assist you in:

• IFRS advisory
• Pension reform
• Gender pricing
• Claims benchmarking
• Data quality
• Customer retention
• Fast close
• Reserving (focus on MTPL)
• Operational efficiency and cost reduction
• Trainings (Regulatory and Operational)

Internal Control System

In the last years, in light of the world financial events, management becomes more orientated towards asserting the design and operating effectiveness of their control environment.

As control experts, we provide services related to the adequacy and efficiency of the internal control system, including implementation and maintenance, in order to determine if the main objective of the internal control system to reasonable ensure the efficient conduction of business by the banks/insurance companies, including the adherence to management policies, safekeeping of assets, prevention of fraud and errors and the rigor of the financial records, compliance with laws and regulations and timely preparation of reliable financial and prudential information is accomplished.

Our work is focused on:

a) Internal control environment

b) Compliance function

c) Risk management function

d) Internal audit function

e) Identification and analysis of deficiencies comprised of real or potential issues identified

f) Design of a risk matrix

We can assist you in:

• Identifying key risks that have impact over the reliability of financial statements and determining whether existing controls are aligned to the risks identified
• Identifying controls gaps and designing an efficient, effective control framework that manages business risk and delivers value
• Implementation of controls procedures including practical policies, procedures and training 
• Developing methods to measure and monitor control performance together with a suitable assurance model (including implementing technology solutions to improve compliance).

Mergers & Acquisitions

Over the last year, financial services organizations have been placed under unprecedented pressure, creating a situation where restructuring has become a critical issue.

We are a privileged consultant who was involved in most of the merger/de-merger projects in Romania banking and financial service industry. Deloitte has an extensive experience in terms of project management, as well as strong expertise in interpretation and implementation of the local legislation related to banking M&A projects.

We can assist you in:

• Quality assurance review on the M&A project
• Preparation of the feasibility studies
• Assisting banks for the formal aspects certifying the completion of the M&A project

Regulatory Compliance

The global financial crises are currently bringing financial institutions under increased pressure and closer scrutiny. Also, the Regulator has higher expectations which need to be fulfilled in a consistent manner in order to ensure manageable growth and compliance with laws and regulations.

Regulation continues to pose a major challenge for the financial services industry. We are facing a period of significant regulatory changes, in terms of number of new initiatives, their complexity and the interplay between different regulations. Senior management can no longer afford to treat regulation primarily as a matter of compliance: some regulatory developments raise fundamental questions about the economics of the business that go to the heart of the organization’s strategy.

The regulatory compliance service offering focuses on helping banks and insurance companies address regulatory risks and compliance issues pertinent to their business activities and strategic objectives in an effective and cost efficient manner.

We ensure comprehensive gap analysis and diagnostic against regulations released by the supervisory authorities (National Bank of Romania, Romanian National Securities Commission, Insurance Supervisory Commission).

Our ERS department has developed an approach and a full set of tools to help banks and insurance companies’ management deal with the challenges for the financial services industry and its regulators. We diagnose, check and create a framework of policies. We provide a wide array of services to clients, who proactively seek to promote compliance standards, educate their workforce and detect potential violations. We also assist clients in addressing identified compliance issues.

The EMEA Centre for Regulatory Strategy monitors regulatory developments and provides an expert, objective perspective on opportunities and challenges for clients. It utilizes Deloitte’s Risk and Regulation, Strategy Consulting and other relevant areas of expertise to understand, influence and advise on regulatory change, with a particular focus on the strategic business model and aggregate impacts.

Solvency II

Solvency II is the new solvency regime for all EU insurers and reinsurers, which also covers the insurance operation of banc assurers. Solvency II aims to implement solvency requirements that better reflect the risks that companies face and deliver a supervisory system that is consistent across all member states.

The challenge of preparing for and implementing Solvency II calls for a multi-disciplinary approach. At Deloitte, we are able to provide the required breadth of service expertise that ensures all aspects of Solvency II requirements and opportunities are considered and can support you through the entire process.