Assumed Settlement Reconciliation

November 30, 2015

A large international bank was struggling with the reconciliation between assumed and the actual settlement of trades, which was costing them large amounts of money and considerable man hours. Brickendon were engaged to assess the existing situation, devise a programme to remove operational risk from the current process and to provide a strategic solution going forward.

The Challenges

  • Existing processes are slow and inefficient with too much manual input, leaving potential for substantial human error
  • These errors, and the resulting regular operational incidents, must be eradicated
  • Securities finance is either overdrawn or under-investing its cash as a result of the inaccuracies in the process
  • Official books and records do not match the actual events
  • Significant reliance on end-user computing solutions for core daily processes
  • A number of core spreadsheets are not adequately supported by IT
  • Significant key person risk
  • To remove accuracy concerns caused by client positions being manually compiled on email
  • Complex interaction with systems which don’t communicate with each other leads to many manual workarounds

Brickendon Solution

  • To rapidly deploy a tactical-to-strategic solution removing manual processes, documenting requirements and putting the business in a stable scalable position
  • Document current and future state process flows highlighting areas for change and improvement
  • To mitigate risk by improving processes and systems and target improved alignment between assumed and actual settlements
  • Provide process efficiencies and reduce reliance on manual processes
  • Provide a tactical and strategic roadmap for remediation of problem areas
  • To deliver the solution in four phases

Client Benefits

  • A clear outline of current systems and processes and a detailed roadmap of how things should be changed going forward
  • Reduced risk – it is estimated that improved systems will remove approximately 1/3 of trades that are currently being assumed
  • Free-up staff currently involved in time-consuming manual processes to service their customers better
  • These staff will also be free to chase unsettled positions and help generate new business for the bank
  • Front office will receive data quicker and the quality of the data will be more accurate

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