Financial Services

Financial services firms form a very important part of our economy. Entities in the financial services domain are mitigating reputational risk on an ongoing basis which has led to stronger regulatory norms and compliances which prevents hefty fines and correctional steps laid down by RBI to protect stakeholder’s interest.

Our clients in the financial service space use comprehensive solution of ongoing compliance monitoring of its customers to ensure they could control instances of defaulters in their lending portfolio and ensure defaulter triggers are been captured, analysed and acted upon before defaults or delay in payments.

These instances have helped our clients slowly but steadily mitigate non-performing assets from their portfolio.

Our services also supports credit limit recommendation or any long term loan sanction to check aspects of compliance which might possess threat to repayment and lead to loss of revenue with reputational risk. The compliance challenges are monitored for our clients which helps steadily built compliance culture along with reducing credit default risk.

Monitoring key compliance for brokers, channel partners like adequate policies are in place, statutory registration and dues are been paid timely, Insurance adequacy, Fire & Safety and Process orientation, standard operating procedures checked along with right policy monitoring are in place.

Case Study – 1

CLIENT – A leading Financial services firm

QUERY – Our client had faced reputational risk with media articles pointing fraud at branch level where senior management at the branch was involved in money laundering. This instance resulted in reputational and business risk for our client.

SOLUTION – We conducted quarterly assessment of branch operations covering operation and compliance risk. The operation risk parameters were laid down by RBI, the information was provided by the branch heads and it was re-evaluated during branch visit .The key managerial staff self-attested the entire document at the branch post providing information. This acted as a record for future reference and investigation for banks internal investigation and fraud team.

FINDING – We conducted 2 quarterly assessments for our client, where there were a lot of activities determined by the branch which were not in line with standard operating procedure laid down for each department. Also the ATM operations were adverse than the MOU (Memorandum of Understanding) and guidelines listed by the internal audit team. There was breach in security parameters along with no response or report being generated for the event. This was an eye opener for our client as a lot of parameters laid down by the regulatory authority had less than 60% adherence and possessed a lot of operational risk.

RESULT – The client found 4 out of every 10 branch had red flags in operations and compliance parameters.  The banks internal audit team used our report to ensure correct guidelines are laid and followed in order to avoid and mitigate operation, business and compliance risk. This helped senior management take a closer look of its branch operations helped increase senior management & stakeholder confidence and supported activities for a robust banking system.

Case Study – 2

CLIENT – A commercial lending firm

QUERY – Check compliance for entities/Individual for whom loans were sanctioned. To check and verify If the person/entity has been reported for any kind of illicit wrong doing. This was to help ensure and protect entity against bad loans turning into NPA’s. Also support them in collecting KYC information in the form of statutory documents.

SOLUTION – The client wanted to ensure the cost of conducting check would be minimal and also cover most aspects of the compliance query. We helped client with a checklist of compliance’s they wanted to monitor i.e. they picked basic check listing which helped them in quick turnaround time for check compliance,ensure legitimate disbursement and protection against mortgage fraud.

FINDING – Commercial loan applicants defaulted on basic statutory filings and some 26% applicants had civil litigation filed against them.

RESULT – The client found that 2 out of every 10 loan application requests had red flags for being non-compliant. This helped the client to revive the terms and get clarification from the subject entity /person and his accountability along with reviving terms for credit. Also a close monitoring system was adopted for key accounts where the (VAR) value at risk was higher.