Mapping a new direction in bank compliance
To promote sustainable risk management, KPMG helped a top U.S. bank create a centralized architecture to consolidate and integrate process, compliance, and operational data.
Client
A top ten U.S. bank
Sector
Financial services
Project
Business and risk integration
Client challenge
For over a century, this top 10 U.S. bank has been committed to helping its clients and community gain the confidence they need for themselves, their families, and their businesses to reach their financial goals. Like several financial institutions, the bank had not solved the challenge of harnessing data to create sustainable, real-time process views that included risk, compliance, and testing data. Wanting a deeper understanding of its business processes and operational and compliance data, our client decided to automate the mapping of its business processes to promote sustainable risk management and strategic growth.
These objectives were ideally suited for creating a centralized architecture that integrated process, compliance, and operational data consolidated from disparate systems. This approach would allow the bank to dynamically create and update visualizations at the point of execution, which, in turn, would allow them to serve their clients better.
Working closely with our Technology and Enterprise Governance team, our Regulatory and Compliance practice developed a distinct solution never seen before in the banking industry.
Approach
KPMG first began working with the bank in 2014 to streamline the consumer lending process for credit cards, home equity, and automotive loans. We created process maps at the point of execution, inclusive of the rules and regulations that applied and what steps, controls, and reviews were needed to give the borrower the best experience.
The engagement was so successful that the bank realized it needed a way to normalize, organize, and map data and automate process mapping regularly across the enterprise.
For the next two years, we met with groups throughout the organization and discovered they were leveraging different data from multiple systems of record and were mapping processes in different ways to document risks, controls, and regulatory obligations. Sometimes the data necessary to map a process did not exist. What the bank wanted—but did not have—was an automated solution that consolidated data from disparate systems and published it in real time as detailed images of step-by-step processes. These processes would guide employees on how to view risk in the business and make their daily work more efficient.
Working closely with our Technology and Enterprise Governance team, our Regulatory and Compliance practice developed a distinct solution never seen before in the banking industry: a centralized data architecture integrated with process mapping software that can dynamically produce visual process maps connected to other source systems within the organization. Additionally, we implemented technical governance to create a consistent taxonomy that specified the source systems for each data set and the relationships among the data (e.g., regulatory requirements have a many-to-many relationship with regulatory obligations). As a result, the bank can produce process maps linked to risks, controls, compliance, and other business data points and maintain change sustainably with automated process flows.
To make the solution affordable, KPMG and the bank:
1
Jointly invested development dollars in a pilot engagement to demonstrate that the solution could meet the organization’s needs at an enterprise level, not just at the original need supporting the first line of the business.
2
After a four-month pilot, full-fledged implementation commenced.
3
As part of a broader business transformation, KPMG’s solution is viewed as an essential component to help the bank grow and become a compliance leader.
Benefits to client
KPMG’s distinct solution helped the bank leverage technology to automate the mapping of processes tied to risks, regulatory requirements, controls, and other data consolidated from disparate systems of record, which, in turn, dynamically updates the maps in real time as source core changes. This solution transforms the highly manual activities of managing change across the three lines of defense, including the suite of risk assessments and process map recertification. With these capabilities, the bank can:
1
Consolidate issues across the enterprise with sustainable management of links to key business and risk information.
2
Identify and prevent gaps in risk management and controls, including risk and control self-assessment activities, through visualization at the point of execution.
3
Enable sustainable management of process maps at the point of execution tied to obligations, risks, and controls.
4
Reduce regulatory issues by maintaining a single version of the truth that provides greater insight into the bank’s processes at the click of a button.
5
Improve the speed, accuracy, and efficiency of regulatory reporting and reduce its cost as process maps are updated automatically, not manually.
6
Manage future regulatory and business process change through a standardized, effective, and efficient governance model.
KPMG insights
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You are only as good as your data
It is difficult to automate what has never been created. A big portion of this engagement involved identifying the data objects—the risks, controls, and processes—to include on process maps, then deciding how to capture and consolidate the information and relationships across those data objects so that process maps could be created dynamically.
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A single vision of the truth requires a clear strategic vision
Different stakeholder views need to align at the outset on long-term goals before the project can be executed. Groupthink can slow decision making when competing initiatives arise. These projects need to be prioritized and aligned in a phased approach, if necessary, to achieve consensus on the broader use case.
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Trusted vendors need to know your business as intimately as you do
Relationships show their value when pursuits take many years to come to fruition but end in mutual success. The key is to understand the client’s business holistically—not just the organizational chart but also the relationships among key players, not just how loans and mortgages originate but also how different they are by product, geography, channel, and state laws.
Meet our team
Todd Semanco
Partner, Advisory, FS Regulatory & Compliance Risk, KPMG US
Todd Semanco
Partner, Advisory, FS Regulatory & Compliance Risk, KPMG US