The Importance of Incident Management Procedures in Financial Services

Background

Our client, a leading UK private bank and wealth manager with operations in the UK and Europe, migrated its Investment Management Operations (IM Operations) processes to the UK.

As part of this, the ownership for managing related incidents was also migrated to the UK.

An increased rate of processing errors and issues would increase the client’s exposure to operational risk and prevent regulatory non-compliance, reputational damage, and financial loss.

Therefore, PryceWilliams were engaged to conduct a review of the relevant incidents and provide a framework to be used by the business to embed Incident Management procedures into BAU.

Approach

Our approach involved five key deliverables:

• Analysis performed of the relevant incidents
• Conducted a review of the end-to-end process flows
• Identified points in the process where the incident occurred
• Recommended control enhancements to the process
• Developed an Incident Management playbook for IM Operations

Analysis Performed

We engaged with key SMEs across the business, including IM Operations, Service Management, Operational Resilience and Business Controls, to complete the following:

Performed analysis of the relevant incidents

We reviewed relevant incidents covering a wide range of events and analysed these by type and business area impacted. Workshops were held to review these lists with stakeholders to assess the impacts, with a focus on the events with a higher probability of recurrence.

Conducted a review of the end-to-end process flows

We reviewed the end-to-end process flows for the migrated activities, relating to incidents experienced. This review ensured that the flows accurately reflected the steps needed to deliver the activities and any required updates were made.

Identified points in the process where the incident occurred

By carrying out root cause analysis of incidents and identifying process gaps, we were able to pinpoint where processes broke down and why. This highlighted knowledge gaps which required further training.

Recommended control enhancements to the process

Through reviews, we also identified where in the process more robust controls were needed. By refining the control activities, we were able to streamline processes and enhance the effectiveness of controls.

Incident Management playbook

To develop an Incident Management playbook, we held sessions with key stakeholders to review the current process and provide insights, to deliver a simplified quick-reference guide.

As well as collating the key incident management information into one central place, the playbook highlights the different incident types, escalation points, key contacts across business areas and supporting documents required for managing an incident.

The teams were encouraged to review this document on a periodic basis and refine it as needed.

Conclusions

We recognise that the occurrence of errors and incidents will always be a part of a business and are often unexpected and difficult to plan for. However, by taking a proactive approach, we achieved the following outcomes for our client:

• Enhanced process documentation and an increased understanding of contingencies which can support staff training and upskilling.
• Increased understanding of incident events and the escalation points, to help reduce the impacts and support the resolution of incidents.
• A documented Investment Management-focused framework for managing incidents, which can be referred to and refined going forward.

We worked seamlessly with our client to supplement and enhance their existing incident management process, whilst causing little disruption to BAU, allowing the teams to focus on their day-to-day activities.

Recommendations

Based on the successful execution and lessons learned from this project, we recommend the PW Project Planning check to support any future change or similar initiatives.

For example, the PW Project Planning check covers:

• Ensure your teams are equipped with the knowledge to manage incidents.
• Identify processes and procedures which could be updated and enhanced.
• Reduce the probability of incidents by mitigating your exposure to risks.

Next Steps

PryceWilliams provides specialist consulting and project delivery services for investment management firms with regulatory compliance needs. Our focus is on supporting the project sponsor to ensure project implementation is delivered on time and within budget. Should you need support, contact us to make progress happen.