With the Banking Executive Accountability Regime (BEAR) effective since the begin of 2018, banking executives become more accountable for their responsibilities. The regime permits more direct regulatory intervention, e.g. adjustment of remuneration or civil penalties for accountable persons and organisations.

When transforming a business of a large organisation, complexities increase manifold when multiple jurisdictions need to be covered. Crucial factors for success include:

  • dedicated senior management sponsorship, e.g. Chief Operating Officer of the group sponsors the entire transformation of all business functions
  • sophisticated business transformation governance, e.g. one representative for each jurisdiction with authority to make decisions for all business functions in that jurisdiction
  • approved target operating model balancing the needs of the entire organisation with the requirements of individual jurisdictions, e.g. 70% centralised services provided to all jurisdictions from a low-cost location and 30% services covered by the jurisdictions themselves
  • sequenced execution and standardised reporting with drill-down capabilities, e.g. 5 groups of jurisdictions with similar characteristics starting with the easiest group as a pilot
  • functional consolidation to achieve sustainability with trade-offs between centralisation and local, separate implementations, e.g. upgrade centralisation to 85% with the remainder covered by individual jurisdictions; regional centralisation to be considered

In order to transform the business successfully, listed factors must be managed for all jurisdictions and business functions in scope.

Since banking executives’ accountabilities are increasingly scrutinised by respective regulators, appropriate evidence for their involvement must be created and retained. Evidences should include:

  1. Meeting minutes with sufficient details reflecting challenges of specific points, discussions of risks and decision as well as approvals. Minutes containing these details can serve as evidence for business conduct with honesty, integrity, due skill, care as well as diligence.
  2. Frequent formal and informal updates in form of progress reports. These reports can serve as evidence for preventing matters from arising which may impact on the banks prudential standing and reputation.
  3. Evidences for appropriate information dissemination throughout the organisation, e.g. senior management emails, Q&As etc.
  4. Link between success of the business transformation and remuneration in the performance appraisal system and respective approval committees

 

Can these evidences be provided on request for each multi-jurisdictional business transformation?