A bank has outsourced substantial parts of its value chain to a service provider. The activities aimed at coordinating and monitoring service-related activities are to be concentrated centrally. There is no professional provider management with an overall concept and prioritized tasks. Due to time constraints, the provider management must be created at short notice.

Procedure

Strategy and governance:

• Defining the strategy and the role for the provider function
• Outlining the governance model together with roles and responsibilities

Functions and processes

• Selecting and prioritizing the provider management functions
• Developing the process model and describing the main activities for each process
• Describing and introducing the provider management functions
• Detailing and implementing the provider management processes
• Attributing process activities to provider management functions

Resources and systems

• Defining the skill & staffing requirements for each function
• Preparing job descriptions
• Staffing through internal and external recruiting
• Defining functional and non-functional tool requirements for function support

Organisational structure

• Defining the organisational provider management structure
• Outlining service range and service depth

Success

Successful provider/ vendor management implementation in order to comply with regulatory requirements (in particular §25a KWG). Central functions of the provider management monitor and control internal and external providers in line with statutory requirements and provide for targeted project realizations and sustainability.

An universal bank has decided to outsource the securities division to a specialized bank. The objective of a subproject was to identify relevant issues for the finance division within the scope of this outsourcing, to structure, to define and to draft corresponding alternative solutions. The planning for the implementation of these topics had to be carried out.

Procedure

• Analysis and description of implications for finance
• Providing an overview of the processes which require adjustments or, as the case may be, which can be further optimized through the project
• Preparing a list of requirements from finance relating to the outsourcing project
• Defining the fundamental solution architecture or scenarios („big picture“)
• Coordination of overall market & master data requirements
• Setting time schedules, task & milestone plans for the tasks allocated to finance, taking into account any projects running in parallel
• Coordination of milestones and interdependencies within the overall project
• Determining resource requirements for an implementation project in finance
• Identify and evaluate potential risks for finance and preparation of a list of measures to minimize risks
• Clarification of basic SLA requirements from the perspective of finance

Success

Through systematic project management, the overall project was implemented on time. Additional measures were identified and planned for optimizing processes, the system architecture, data quality and reporting.

A bank has outsourced substantial parts of its asset management value chain to a service provider. The outsourcing does not relieve the bank from its responsibility to provide these services. Regulatory provisions require measures to enable the bank to effectively monitor the activities of the service provider at any time. For this purpose, product and service descriptions were prepared and set out in SLAs.

Initial situation

• Previously agreed results were not achieved by our predecessor within the set time and with the agreed quality
• Extensive criticism of the current level of service descriptions by internal audit, e.g.:
  1. No key performance indicators (KPI) established
  2. No specific performance assessment reports implemented
  3. Insufficient definitions for formats, times, error processing, escalation etc.
  4. Requirements from the perspective of outsourcing controlling are unclear

Procedure

• Enhancement of existing SLAs:
  1. Clear definition and delimitation of specific service descriptions
  2. List of technical interfaces und supply times
  3. Definition of reporting requirements and KPIs
  4. Definition of escalation rules for each service element
  5. Documentation of overall guidelines (e.g. enhancing SLAs)
  6. Taking into account operational risks
• Amendment of existing product & service descriptions with regard to
  1. Process requirements
  2. Support and supply obligations of customers

Success

Creation of a SLA framework pursuant to highest market standards, providing external market capability. External requirements (e.g. auditors) and internal objectives (internal audit) with regard to service descriptions and service levels are fulfilled.

The assignment comprised detailing the specific requirements of the bank with regard to risk- and limit management, including the review of existing or identified potential limit systems with regard to possible (further) use. Definition of an integrated and coordinated system solution.

Procedure

• Establishing and coordinating all relevant product categories, including the risks and limits to be monitored
• Consolidating specific requirements with regard to risk monitoring, risk analysis and reporting by the divisions concerned
• Support for establishing limit processes and ensuring flexibility for limit handling, forecast and intraday monitoring.
• Defining minimum requirements, in particular with regard to timeliness and system consolidation for monitoring the entire bank (limit monitoring across trading systems)
• Documenting any requirements with regard to further work sections and projects (e.g. with regard to evaluation models)
• Benchmarking of intraday risk measuring requirements and monitoring pursuant to MaRisk

Success

• Detailing of the requirements for a (intraday) risk and limit management
• Documentation of the requirements for the limit system and the processes to be established
• Establishment and assessment of possible risk and limit management systems (Long List)

Within the initiative for introducing a trade-independent P&L determination for commercial & investment accounting, a transparent and adjustable result determination is to be established along the process chain and statutory requirements must be fulfilled.

Procedure

• Establishment of a specific mission statement across functions for a trade-independent front office P&L determination and its transition to back office P&L
• Inclusion of processes and specific requirements of the involved divisions
• Classification of the analysis results for:
  • trade-dependent P&L
  • trade-independent P&L
  • Back office P&L
• Identification of possible error sources, e.g.:
  • Different market data supplies for the aforementioned P&L determinations
  • Staggered assessment times
• Identification of general issues
• Establishment and coordination of the mission statement across functions

Success

Design of recommendations for implementing a strategic approach has been presented to the board of management

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