1

www.braxxon.co.uk

Operational Solutions

Challenges of Operational Risk and Basel II

Presentation to Members of the

Banks Association of Turkey

M. Kemal SahinBrian JewsonRob Millington

www.braxxon.co.uk

Agenda

14:00 Introductions

Braxxon’s view of Operational Risk and Efficiency

Basel II Accord – Market perception

15:00 - 15:10 Break

Basel II Accord approaches

Basel II implementation

16:10 - 16:20 Break

Business benefits – Return on Investment

Impact of EU’s Markets in Financial Instruments Directive (MiFID)

Braxxon’s services

Questions?

17:30 Close

2

www.braxxon.co.uk

Introductions

www.braxxon.co.uk

Braxxon company overview

• Founded in 1988

• Niche Market Focus

• Business Practices based on industry knowledge and technical expertise

• Business Processes and supporting technology

• High rate of repeat business

• Global capacity

3

www.braxxon.co.uk

Employees

• Resource pool of over 100 consultants

• Spread of skills

• Typically 10+ years relevant experience

• Detailed database of consultant expertise

www.braxxon.co.uk

Clients

USA• JPM Chase, Citigroup, Lehman Bros, Morgan Stanley

UK & Europe• ABN Amro, HSBC, BNP Paribas, Credit Suisse, Deutsche

Bank, ING, Rabobank, Dresdner Kleinwort, UBS, RBS, Bayerische Landesbank

Africa• Standard Bank of South Africa, ABSA

Others• Arab Bank, National Australia, Nomura, Standard Bank,

Mizuho, Mitsubishi Securities, Cantor Fitzgerald, Hermes, Prudential, Schroder Investment, Tullet & Tokyo, Invesco.

4

www.braxxon.co.uk

Braxxon’s view of Operational Risk and Efficiency

www.braxxon.co.uk

Operational Risk & Efficiency Practice

• Increase competitiveness and minimise operational costs

• Optimise client service quality

• Manage risk

• Compliance

• Sarbanes Oxley Act 2002, Basel II and MiFID

5

www.braxxon.co.uk

Operational Risk methodology

• Diagnostics

• Modelling

• Best practice / bench-marking

• Gap analysis

• Cost / benefit analysis

www.braxxon.co.uk

Operational Risk framework

• Definition and establishment of operational risk management framework

• Identification of risk

• Assessment of risk

• Reporting structure

• Remedial actions

• Embedding operational risk within day-to-day operational and management culture

• Although not included in the Basel II definition of Operational Risk, Reputation Risk is a key element

6

www.braxxon.co.uk

Operational Risk Diagnostics

• Risk policies and procedures

• Establish / assess Key Risk Indicators (KRIs)

• Establish / assess Key Performance Indicators (KPIs)

• Collate and evaluate qualitative date

• Collate and assess quantitative data

• Analyse data against KRIs and KPIs to measure efficiency

• Existing procedures, processes, systems and controls

• Escalation procedures

www.braxxon.co.uk

Modelling

• Process mapping for identification of weaknesses and specification of remedial actions for operations and management

• Map calibration

• Metrics-based service costing

• Identify control weakness and remedial actions

• Root cause analysis related to loss events

7

www.braxxon.co.uk

Best practice and bench-marking

• Quantitative external bench-marking of service quality and cost

• Internal bench-marking i.e. department against department

• Data used to set targets for performance improvement

www.braxxon.co.uk

Risk and Efficiency gap analysis

Based on analysis, change programme defined for:

• Policies

• Processes

• Procedures

• Systems

• Controls

• Organisations

8

www.braxxon.co.uk

Cost benefit analysis

• Activities cost justified and matched against ‘appetite for risk’

• Business benefit imperative

• Reduction of regulatory / economic capital

• Reduced costs for errors

• Improved service quality - client satisfaction

• Scalability - reduced volume dependency and increased capacity without need for ‘new hires’

www.braxxon.co.uk

Basel II Accord – market perception

9

www.braxxon.co.uk

Basel I and Basel II compared

Basel I Capital Accord

• Risks assessed using a single measurement

• This single measure is applied to all items of risk

Basel II Capital Accord

• Banks encouraged to use proprietary methodologies, supervision and market discipline

• Three approaches made available and financial incentive for more effective risk management

• Greater sensitivity for risk

www.braxxon.co.uk

Basel II Accord

• Bank for International Settlements (BIS) Basel Banking Committee for Banking supervision

• Basel II Accord is a framework for capital adequacy

• Committee first established in 1974 comprising central banks of Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, US and UK

• The Basel II Committee reports to the G10 countries’ central bank governors

• Proposes standards, guidelines and best practice with the expectation that they will be adopted and implemented by banking authorities

10

www.braxxon.co.uk

Compelling reasons for Basel II

• Effective Operational Risk Management is basis for sustained growth and increased income – a differentiator

• Significant number of high-profile losses – NAB $250m, Allied Irish $519m, Arthur Andersen collapse, Daiwa $1.1bn, Barings $1.5bn…

• Strong and effective operational risk management will reduce regulatory capital requirements

• Rating agencies are already evaluating operational risk capabilities of firms – this is expected to increase

• Insurance policy pay-outs of claims often dependent on compliance

www.braxxon.co.uk

Basel II Accord timetable

• July 1988 Basel I introduced

• End 1992 deadline for Basel I implementation

• June 1999 – May 2003 Basel II consultative documents

• June 2004 Release of Basel II final draft

• January 2006 parallel run Basel I and Basel II

• December 2006 Implementation Basel II (Standardised methods)

• 1st January 2007 implementation date for Basel II and EU CRD

• December 2007 Implementation Basel II (Advanced Measurement Approach)

Capital Requirements Directive (CRD) – EU’s response is virtually identical to Basel II

11

www.braxxon.co.uk

Dangers of non-compliance

• Potential increase in capital adequacy requirement

• Increased scrutiny from supervisors

• Removal of banking licence

• Failure to manage operational risk that results in breaches of capital requirements often result in demand for increased adequacy

• Anticipated G10 banks will introduce legislation to impose fines

• In UK, FSA has / will have similar powers

• Sanctions would / could result in reputation damage

www.braxxon.co.uk

Basel II Accord approaches

12

www.braxxon.co.uk

Three Pillars of Basel II

1. Minimum Capital Requirement

• Standardised approach

• Foundation *IRB approach

• Advanced IRB approach

Options to measure operational risk

• Basic

• Standardised

• Advanced Measurement approaches

Options to measure Market Risk remain unchanged

2. Supervisory Review of Capital Adequacy

Supervisors responsible for evaluating how well financial institutions are assessing their capital adequacy requirements with regard to their needs – includes a stress test model

The institution’s process will be subject to supervisory review and intervention as and when appropriate

3. Market discipline

Market discipline strengthened by expanded reported by financial institutions for:

• Regulatory and economic capital adequacy

• Credit risk

• Market risk

• Operational risk

• Securitisations

• Risk measurement standards

*Internal Rating Based

www.braxxon.co.uk

Definition of Operational Risk

• Operational risk is: ‘The risk of losses resulting from inadequate or failed internal process, people and systems, or external events’

• Many financial institutions are adding ‘Reputation Risk’ to the Basel II definition for their own internal definition

• Pillar 1 introduces explicit capital requirements for operational risk

• Effective operational risk management facilitates flexibility in regulatory capital

• Creates a monetary incentive to introduce and maintain effectiveoperational risk management

13

www.braxxon.co.uk

Implementation approaches

Three different approaches to calculating Capital Adequacy

Basic Indicator Approach

Gross income for the bank

Regulatory Capital Requirement

15%

Standardised Approach

Retail banking, brokerage and Asset management

12%

Commercial Bank and Agency services

15%

Corporate finance, Trading & Sales and Payments &

Settlement

18%

Advanced Measurement Approach (AMA)

Internal Operational Risk Measurement

Internal models

Regulatory Capital Requirement

Expected Loss (EL) plus Unexpected Loss (UL)

A B C

www.braxxon.co.uk

A. Basic Indicator Approach

• A fixed percentage of a single measure i.e. Gross Income

• Gross Income is a positive figure

• Basel II sets a 15% capital adequacy

• The formula used in the calculation gives the average capital requirement over the previous three years for those years in which there was a positive annual gross income

14

www.braxxon.co.uk

B. Standardised approach

In calculations each business line has its own multiplier of Gross Income

Basel II capital adequacy set in range of 12% - 18% e.g.

Business line Multiplier

Trading and sales 18%

Retail Banking 12%

Commercial banking 15%

Payment and settlement 18%

Asset Management 12%

Retail brokerage 12%

Negative capital charges in one business line can offset positive capital charges in another business line. The capital charged is averaged over the previous 3 years, with a zero for any year in which the total capital charge was negative

www.braxxon.co.uk

C. AMA Basel II qualifying criteria (i)

General standards

• Active involvement of Board / senior management

• System is sound and implemented with integrity

• Sufficient resources in businesses, control and audit

15

www.braxxon.co.uk

C. AMA Basel II qualifying criteria (ii)

Qualitative standards

• Independent operational risk management function

• Integral part of operational risk management including economic capital

• Regular reporting to senior management / Board

• Well documented system

• Reviewed by internal and external audit

• Validation by auditors and / or supervisors

• Soundness comparable to Internal Rated Basis (99.9% one year, likely occurrence once per millennium)

www.braxxon.co.uk

C. AMA Basel II qualifying criteria (iii)

• Expected Loss (EL) + Unexpected Loss (UL) unless adequately capturing EL

• May use internally determined correlations, if they can be validated

• Internal data

• Relevant external data

• Scenario analysis

• Business environment and internal control factors

• Loss data history of 5 years; transition period 3 years

• May recognise risk mitigation through insurance, though with a cap of 20% of loss

16

www.braxxon.co.uk

Home / Host matters

“A bank adopting the AMA may, with the approval of its host supervisors and the support of its home supervisor, use an allocation mechanism for the purpose of determining the regulatory capital requirement for internationally active banking subsidiaries that are not deemed to be significant to the overall banking group, but are themselves subject to this Framework…”

“…the incorporation of a well-reasoned estimate of diversification benefits may be factored in at the group-wide level or at the banking subsidiary level.”

(Basel II June 2004)

www.braxxon.co.uk

Differing approaches

Across an organisation it is possible to use differing approaches e.g.

• Head Office could use Advanced Measurement Approach

• Subsidiaries could use Standardised approach

• Overseas branches could use Basic Indicator or Standardised approach

National Regulatory Authorities where branches and subsidiaries are located will approve and validate Standardised approach and Basic Indicator approach if used

National Regulatory Authorities may have a preference for Standard or Basic Indicator Approach

17

www.braxxon.co.uk

Risk management framework

The same general framework can be applied for all types of risk management even though in this instance we are focussing on Operational Risk

Identify Measure

Control

Transfer

Accept

www.braxxon.co.uk

Operational risk management proceduresRisk identification

• Identify and evaluate operational risks

• Establish risk inventory and determine Key Risk Indicators –benchmark

Measurement

• Gather and collate data and information

• Define a measurement approach or methodology

Control

• Assess and evaluate effectiveness and comprehensiveness

• Define and control self-assessment and certification

• Devise and apply remedial action – perpetual programme

18

www.braxxon.co.uk

Internal data

“Banks must track internal loss data…”

“A Bank must have an appropriate de minimus gross loss threshold for internal loss data collection, for example EUR10,000.”

“Operational risk losses that are related to credit risk and have historically been included in banks’ credit risk databases will continue to be treated as credit risk.”

“Such material operational risk-related credit risk losses should be flagged separately within a banks’ operational risk database.”

“ Operational risk losses that are related to market risk are treated as operational risk.*

Mergers and acquisitions will make pro-merger historical data less useful

www.braxxon.co.uk

External data

Basel II requires use of external databases

• Public loss database

Operational Risk Analytics SAS

OpVantage Fitch

F1.rst Fitch

AON

• Data consortia

GOLD Global Operational Loss Database

ORX Operational Riskdata Exchange Assoc.

19

www.braxxon.co.uk

Business environment and control factors

“In addition to using loss data, whether actual or scenario-based, a bank’s firm-wide risk assessment methodology must capture key business environment and internal control factors that can change its operational risk profile”

There is a requirement to:

• Justify (to the Regulator) the selection of each factor

• Evaluate sensitivity to changes in the factors

• Document and review Framework

• Validate to outcomes over time

www.braxxon.co.uk

Scenario analysis

“A bank must use scenario analysis of expert opinion in conjunction with external data to evaluate its exposure to high severity events. This approach draws on the knowledge of experienced business managers and risk management experts to derive reasoned assessments of plausible severe losses.”

• In addition, scenario analysis should be used to assess the impact of deviations from the correlation assumptions embedded in the bank’s operational risk measurement framework, in particular, to evaluate potential losses arising from multiple simultaneous operational risk events.

20

www.braxxon.co.uk

Basel II Accord implementation

www.braxxon.co.uk

Guidance provided by Basel II

• Basel II urges that an Operational Risk management environment e.g. governance, reporting structure, computer-based tools, procedures and education must be: “…conceptually sound and implemented with integrity”

• Other than this statement Basel II gives little indication as towhat such a system should look like.

• Additional information is provided in the key supporting document ”Sound Practices for the Management and Supervision of Operational Risk” published in February 2003

• With regard to AMA Basel II follows the path of encouraging the industry to explore different ways and means of managing and measuring risk so that industry consensus will be achieved

21

www.braxxon.co.uk

Implementing Basel II Accord

• Operational Risk

• “Best practice” is a prerequisite of Basel II

• BIS’s Banking Supervisory Committee’s intention is that national authorities “will take steps to implement published requirementsthrough detailed arrangements – statutory or otherwise – which are best suited to their own national systems”

• In the European Union, requirements will be applied to all banks / financial institutions by the Capital Requirements Directive (CRD)

• In the UK the FSA’s Markets in Financial Instruments Directive (MiFID, final to be published Q1 2006) will be applied from May 2007

• In the USA requirements will be applied to largest banking groups and only the AMA option can be used

www.braxxon.co.uk

Basel II Sound Practices

The Basel II document Sound Practices for the Management and Supervision of Operational Risk includes key actions:

• Banks must identify, monitor, assess and control operational risk

• Operational Risk framework for controlling operational risk must be approved at Board level

• Information and data flowing from the management of operational risk must be reported to the senior risk governance bodies in the Bank or institution on a regular basis

22

www.braxxon.co.uk

Operational Risk management structure

Board or Director ownership Risk Mitigation Basel II

Risk Management Line Management

Risk Control – Risk Management / Control Units

Defines risk management framework

Sets overall policy and limit structures

Assumes risk positions

Manages risk within established framework

Monitors compliance with framework

Analyses risk profile

Reviews the adequacy of the framework

www.braxxon.co.uk

Basel II framework

Operational Risk procedures

Self-certification process

Ops procedures improvement

Apply risk metrics to measure risk

Record losses

Analyse events –near misses

Confirm standards –benchmark and Regulatory Auth

Risk reduction

Procedures improvement

Operational efficiency

improvement

Basel II Framework

Basel II Capital Requirement

Sarbanes-Oxley 404

Financial Reporting

Framework supports a perpetual programme

of work

23

www.braxxon.co.uk

Key Risk Indicators

Risk Management Association sponsor study by RiskBusinesswww.KRIeX.org (representatives from Insurance and Assurance will be added in due course)

• Industry Steering Group

• Citigroup

• Deutsche Bank

• Dresdner Kleinwort Wasserstein

• JPMorgan Chase

• KeyCorp

• Royal Bank of Canada

• Sate Street

• Abbey

• ANZ

www.braxxon.co.uk

Self-assessment and certification

• Self-assessment aims

• Self-certification / signatories

• Self-assessment / signatories roles

• Self-assessment / signatories responsibilities

• Monitoring and updating process

24

www.braxxon.co.uk

Operational procedures - improvements

• Evaluate / assess current procedures

• Define enhanced operational procedures

• Define enhanced systems

• Define enhanced controls

• Outsourcing / in-sourcing

• Imperative to gain business benefit

www.braxxon.co.uk

Record losses

• Establish loss threshold for internal data

• Process for recording Op Risk related losses

• Historic data to be gathered – past 5 years (initial requirement 3 years at implementation)

25

www.braxxon.co.uk

Analyse events for near misses

• Near-miss events• Benchmarking using external databases• Public loss databases

www.braxxon.co.uk

Confirm standards and review

• Benchmark against external data

• Confirm with External Auditors

• Confirm with Internal Auditors and Compliance

• Confirm with Regulators

• Regular and frequent re-assessments at say 6 monthly intervals

26

www.braxxon.co.uk

Programme structure – Op Risk

• Board direction and sponsorship / ownership

• Programme definition – roles, responsibilities and planning

• Programme charter – how Basel II will be implemented

• Basel II governance / policy / buy-in / reporting

• Operational Risk evaluation of current capabilities –structure, methodology, resources and skill set

• Establish cooperative including Audit (Internal / External), Compliance and Operational Risk functions

www.braxxon.co.uk

Project activities – Op Risk

• Entities / branches to be included• Impact analysis / Gap analysis• Changes to procedures, processes and controls• Business Continuity Planning updated• IT enhancements definition and implementation• Support tool for Basel II• Documentation

27

www.braxxon.co.uk

Basel II implementation progress

Level of Basel II

Compliance

Pillar 1 Pillar 2 Pillar 3Risk policy

Risk governance / organisation

Impact analysis

Data infrastructure

Risk identification

KRIs

Reporting

Capital adequacy approach

Capital allocation

Disclosure

Demonstrate compliance

Use test

Data Reconciliation

Business processes

Parallel run Basel I and II

Supervisory reviews

Continuing change management:

Data

Information

Models

Validation

Enterprise-wide education

Basel II Accord published June 2004

June2005

June 2007

Dec 2006

March 2006

Target date for compliance

Time

Progress towards implementation - operational risk

www.braxxon.co.uk

Business benefits – Return on Investment

28

www.braxxon.co.uk

Business benefits – Return on Investment

• Compliance is mandatory – satisfactory regulatory reviews will reduce increasingly intrusive scrutiny from regulators

• Potential for minimal capital adequacy

• Reputation enhanced and safeguarded - ratings organisations will be able to assess more favourably

• Incidence of loss should be reduced

• Increased efficiency should be a prime advantage resulting in reduced cost per transaction

• Customer quality should improve

• Management control will be strengthened

www.braxxon.co.uk

Basel II Return on Investment

• Effective governance

• Management monitoring and control

• Financial ‘legitimacy’

• Compliance

• Efficiency built on best practice

• Quality service

• Differentiation

• Planned and protected growth

29

www.braxxon.co.uk

Markets in Financial Instruments Directive

(MiFID)

www.braxxon.co.uk

MiFID Objectives

• Market harmonisation from 1st May 2007

• Provide investors with high degree of protection and transparency

• Best execution ensured for investors in terms of cost, speed, order handling transparency and likelihood of settlement

• Coherent and risk sensitive regulatory framework for order execution arrangements in EU financial market

• Enhanced transparency on depth of liquidity in securities

• Uphold integrity and efficiency of financial system

• New standards for conflicts of interest and customer classification

• Result should be greater competition between trading venues, end of the concentration rule

30

www.braxxon.co.uk

MiFID scope

• Execution of transactions in financial instruments and commodities irrespective of trading methods used i.e. securities, equities and derivatives

• Ensures high quality of execution of investor transactions

• Upholds integrity and overall efficiency of the financial system

• Creates a single market on basis of home country supervision (UK = FSA) - passport provided under home country regulatory supervision

www.braxxon.co.uk

MiFID current status

• Consultation role completed – Directive estimated to be twice size as first envisaged

• Most UK (resident) and some European banks may be “Systematic Internalisers” (see next slide)

• Concentration Rule to be removed (see second next slide)

• Europe has no single platform from which to respond to EU Directive

• Impact of MiFID and magnitude of implementation becoming apparent

• Publicity machine getting into gear in prep for 2006 budget cycle but still no lead from Regulators – expected there will be direction during October

31

www.braxxon.co.uk

Systematic Internalisers (SIs)

• Institutions that execute a substantial volume of trades internally, without going through a regulated market

• Systematically internalise (SI) execution orders away from central facilities either acting as principals or facilitating agency crosses

• Retail size market orders automatically executed at best bid price in the central market for sell orders or best offered price for buy orders

• Advantage is that intermediaries allowed to reduce or avoid fees paid to exchanges – internalisation becomes more attractive as they have more orders to work with

• Obligation on SI to distribute quote to market within 3 minutes of execution

• Estimated there will be 400 – 500 active SIs

www.braxxon.co.uk

Concentration Rule

• MiFID acts to repeal Investment Services Directive, Article 14(3) which allows national authorities to stipulate that retail investor orders be executed only on a “regulated market”

• Article 14(3) allows Member States to require investor firms to route all orders transmitted on behalf of retail investors to a regulated market for execution – aim was to protect investors and improve prospects for best execution

• Concentration as it stands at present requires execution in certain financial instruments on a regulated market – intended to enhance investor protection by limiting off-market transactions to professional investors

• In absence of Concentration Rule (i.e. MiFID) retail trades may be executed away from the main market centre using SIs and Multi Trading Facilities (MTFs)

32

www.braxxon.co.uk

EU market perspective

• Presently, activity in the market is increasing with greater awareness and realisation that the likely time available to achieve implementation is relatively tight

• Until recently firms have preferred to let the EU develop MiFID and implement in due course – market perception is that FSA is not providing a lead therefore other issues can be prioritised

• Also, MiFID seen as a compliance and legal issue rather than an Operational Risk matter – while compliance is essential from a practical viewpoint majority of changes are operational risk in nature

• MiFID is an opportunity to benefit from improvements in efficiency, service quality for clients, strengthened controls and market differentiation

• Report published by CELENT estimates market cost of EUR1.1bn. Potential opportunity for ‘systematic internalisers’ EUR1.0bn plus income of EUR150m for selling data to market

www.braxxon.co.uk

EU market-wide impacts - general

• Compliance risk-based evaluation of business and operations and review of compliance capability

• Internal systems resources and procedures, risk management policy, Reconciliations and adequate BCP

• Outsourcing effective management for outsourcing and in-sourcing notification for regulator,

• Record keeping sufficient records stored, extended database e.g. price data retained for 5 years and phone conversations for 1 year

• Safeguarding clients assets legal requirements to be assessed and compared to service provided

• Management of change requirement to notify regulator of changes to business lines / operations / additional branches

• Conflicts of interest research must not benefit / rewarded as a result of another department’s performance

33

www.braxxon.co.uk

EU market-wide impacts – safeguarding investors

• Fair, clear and not misleading – information for clients and supervisors all published collateral and documentation whether web-based or paper

• Information to clients all statements made e.g. offers, must be verifiable and substantiated

• Retail and professional client agreements clients to be re-classified as professional, market counter-parties and non-professional, agreements signed. Detailed client data to be maintained.

• Reporting to clients new reporting required related to alerts, portfolio performance and comparisons

• Best execution more demanding standards

• Client order handling time-stamping and tracking transaction events

• Eligible (market) counterparties status monitoring, be prepared for trade opt-out

• Transaction reporting volumes, prices, dates and times etc.

www.braxxon.co.uk

EU market-wide impacts – transparency and integrity

• Pre-trade transparency Systematic internalisers must publish bids and offers

• Market transparency Exchange and non-Exchange trades to be published

• Admission to trading money market, derivatives units (collective investments)

34

www.braxxon.co.uk

Other important impacts

• Forced restructuring of front office sales roles and back office support structure brought about by increased algorithmic trading – reduced head-count may become apparent

• Common framework for classification of professional clients, market counter-parties and retail clients

• Emerging improved IT landscape focussed on multiple EU financial institutions participating in shared services rather than exchange connectivity

• Majority of IT resources directed to provide order routing and management systems supporting multiple location trading and data storage

• MiFID Working Groups estimate European Banks will spend EUR4-6 billion on IT (EUR1.25 billion in the UK)

• Requirement for firms to conduct client suitability test when providing investment advice (non-complex instruments)

• Onus on investment firm to Know the Client’s business well or suffer the consequences

www.braxxon.co.uk

Further points to consider

• Concentration rule elimination may result in a number of new quasi exchanges emerging to form shared central finances collective

• When MiFID is finalised it is anticipated that the EU will shift attention to settlement e.g. AML3, Clearing and Settlement Directive (level 1 expected 2006 for 2009 implementation)

• Expected that MiFID will next be rolled out for Fixed Income Division products

35

www.braxxon.co.uk

Evolving IT landscape – an optimistic view

European trading now Envisaged European environment

Exchanges

Multiple EU financial

instruments central services

Exchange Exchange

Data provider Data provider

Data provider

Investment firm 1 Investment firm 2

Investment firm 3 Investment firm 4

New investors

New investors

Complex legacy infrastructure Proprietary standards Difficult entry

High cost Inflexible Constraints

Low cost Flexibility Easy access

Latest infrastructure Open market

www.braxxon.co.uk

Braxxon’s value proposition

36

www.braxxon.co.uk

Braxxon’s value proposition

• Operational Risk and efficiency project experience

• Hands-on knowledge of Basel II and MiFID

• Assess and report on current state of compliance readiness

• Project Management for compliance

• Ability to structure multi-stream programmes, delivering end-to-end operational risk solution

• Capability to provide guidance, direction and education as part of a coordinated and structured programme

• Skills transfer

www.braxxon.co.uk

Braxxon’s credentials

• Established operational risk management functions at a number of financial institutions

• Practical Programme Management experience involving Sarbanes-Oxley and Basel II

• Designed operational risk management frameworks for a number of major international banks

• Prepared operational risk policies

• Written and tested business continuity procedures for a number of banks

• Run executive and management educational workshops

• Completed market surveys of operational risk preparedness

37

www.braxxon.co.uk

Questions?

Contact BraxxonBraxxon Technology Limited

24 Bedford Square

London WC1B 3HN

www.Braxxon.co.uktel:+44 (0)20 7436 2525fax: +44 (0)20 7436 8436