Executives around the world are questioning themselves how to best manage the increasing regulatory burden on their institution. In the whole process of getting to grips with which regulation,location, who is being impacted and when, the conversation naturally broadens to “Can we solve this problem ourselves, do we know the scope and complexities, is this our core business or will it divert attention and resources away from what we know we are good at?”. “We have been a specialist in regulatory reporting for over 25 years; in North America, Europe and the near and far East. In the BIG DATA world Lombard Risk can unify your data for regulatory purposes and return it for business management purposes in a way that key decision makers have never been able to do before – empowerment!”, says Philip Crawford.

Making regulation a win for a business
Lombard Risk provides a robust solution to address reporting requirements. Data captured from diverse source systems is presented in an easy-to-understand dashboard display, providing valuable business intelligence to support risk and regulatory decision making. The certainty of good data demanded by the authorities can also be used to raise confidence in the quality of internal reports.

A Tactical Approach to Meet Regulated Needs
“Lombard Risk is foremost in the provision of solutions to the industry but we are also surprised by the pace and demands on business of these changes. The remarkable theme across the industry is to first seek tactical solutions”, says Philip Crawford, Executive Chairman, Lombard Risk.

Rapid growth as well as mergers and partnerships in the financial services industry have created a proliferation of disparate and uncommunicative systems. Rather than amalgamating the internal systems, which would be optimal but time consuming, firms are embracing a tactical silo approach whereby multiple business areas capture the cost and responsibilities. In some cases this can result in duplication of effort as all Senior Managers need to allocate time to address the challenges. Furthermore, the responsibility of having compliant operations and reporting accurately and on-time to the regulators is now leveled at individuals through the introduction of the Senior Managers Regime.

Technology is the Answer
Senior executives cannot rest easy without a robust integrated strategic solution with minimal manual intervention and maximized straight through processing; supported by a standard data model and one source database for reporting. Lombard Risk has number of alliances and partnerships with the source system providers which helps the company to speed up implementation times and concurrently adds confidence to the stakeholders.

Financial Officers want to see operational costs down, Compliance Officers yearn to see mistakes minimised and Operational Managers desire to ascertain the ‘heat spots’ (i.e.where and how their data is failing them). They encounter many questions ranging from “Has all the data been captured from the source system? Have all the necessary computations and rules been run, with edit checks and validations, to ensure 100% reporting? Can exceptions be efficaciously identified and managed? Lastly, is there full reconciliation and auditable reports?

While examining these predicaments, Lombard Risk considers Technology to be the answer as it helps to extract human error from everyday process and replace it with robust engineering and automated transmission. Lombard Risk has witnessed a phenomenal development in technology; one key advantage of the new web technology is the ability to exchange data existing on multiple platforms more easily (cost-effectively), thus overcoming the hassles of global companies operating across different technology platforms.

For an example, the BCBS 239 regulation has introduced new standards of data aggregation. This in turn is driving a regulatory agenda towards best practice with little or no manual intervention. I.E, automated data flow – where the data used in the regulatory submissions must be the same as that of the original input which have been put into source trading and accounting systems. And that same data - “untouched by human hands”– must then be re-used for internal reporting to avoid errors and reduce operational risk. Achieving the same, LombardRisk, through its workflow and exception-based straight through processing (STP) and web technology, enables a higher volume of reports to be produced faster and more cost effectively.

Incremental change – ‘tightening the screw'
Regulators today are prone to set regulatory deadlines and then prevaricate about the details, following numerous discussion papers. This distracts the legal staff and stresses the development teams and compromises core objectives and projects. Further, regulators are increasingly embracing XML/XBRL, electronic ‘print’ forms, which is why it has become important to train internal IT staff and prepare them to adopt new protocols. These formats help to merge and analyse data across businesses and borders, but as these formats are only machine readable, validation and automation engines become critical to success. Obliterating these qualms,Lombard Risk is crucially focused on satisfying the Automated Data Flow requirements for firms, including the Reserve Bank of India.

Managing Change in the future
The data challenge is now pivotal to the regulatory solution. Disparate data from disparate source systems can be channeled by Lombard Risk through one platform to multiple regulators in multiple locations. Lombard Risk can bring the data together, transform and transmit whilst simultaneously return management information that can enhance operational efficiency.

Lombard Risk has also partnered with 3rd-party source systems (some of the largest in the world) and further specialist vendors providing front, middle and back office solutions. These companies are often the source of the data and sometimes offer a limited non-core regulatory reporting service – but this is not their speciality and consequently Lombard Risk are partnering for ‘penultimate’ and the ‘last mile’ of the journey, i.e (computations, templates, edit checks and validations, transmissions, response management, reconciliations, analytics and regulatory management information).

In addition, Lombard Risk makes use of the latest software technology and regulatory expertise to deploy a wide range of deployment solutions, meet short term tactical needs and provide benefits of audit and control to satisfy the financial, compliance and operational demands. Further, the ETL Tool validates and normalizes the data, thus preparing it for the database repository, future processing and ensuring the highest quality of data and best reuse. Database repository is entirely open, which has been designed to reflect a familiar financial/regulatory structure for the ease of re-use. Along with this, the reporter software uses the data for computation and return generation in line with each country and regulator’s requirements, thus enabling a complete regulator-defined validation processes.

Collateral management
Lombard Risk’s COLLINE is a web-based collateral management solution which was launched in 2005.COLLINE delivers a comprehensive cross-product, end-to-end solution benefiting the entire collateral lifecycle thus helping firms mitigate counterparty risk, comply with changing regulations, and effectively manage growth. The solution focuses on cross-product support, central clearing, inventory management and collateral optimisation.

Having offices in New York; Hong Kong, Mumbai, Shanghai, Singapore and Tokyo in Asia Pacific, and service centres in Atlanta, Cape Town, Luxembourg and Miami, Lombard Risk envisages of achieving a customer retention rate that is consistently one of the highest in the industry through its services.

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