Case Studies
A Private Bank: Regulatory Audit Review
Client contact: Managing Director
Parkwell staff: 1 senior consultant
Objectives and project background
The private bank’s holding company decided to merge their private clients’ banking operation with the private client asset management arm to form a new private bank.
To open this new bank a banking licence was required from the FSA. In the process of a previous audit the FSA had identified a large number of shortcomings in the old bank’s operational areas. The FSA stated that the licence could not be granted until the shortcomings had been rectified and the bank had passed a subsequent follow up audit.
The key objectives were:
- To identify all the audit points and plan a resolution for each point.
- To manage the work to rectify the audit points.
- To confirm all the points were complete prior to the follow up audit.
- To liaise with the regulators and auditors during the follow up audit.
Anticipated Benefits
- Significant improvement in operational procedures.
- Obtaining the new banking licence.
Scope & Boundaries
Key activities were as follows:
- Review of all outstanding audit points.
- Agree plan for rectification of each problem.
- Manage the rectification of each problem.
- Internal Audit to retest and to sign off each task.
The scope was limited to the operational areas of the bank and to the points identified in the original failed audit. However, following completion of the project the methodology used was applied to the remaining areas of the bank to ensure a robust control environment was available throughout the organisation.
Deliverables
Deliverables were as follows:
- Clear identification of the problem and rectification plan for each audit point.
- Regular progress reports to senior management.
Project Conclusion
The follow up audit was successful with over 90% of the points that had previously failed now being deemed resolved. This directly led to the bank’s successful application to the FSA for a banking licence and the business launch of the private bank in September 2000.
The successful conclusion of the project meant Parkwell had initiated an ongoing relationship with the private bank and this resulted in a number of further projects.