Client Challenge

An international bank under regulatory scrutiny faced significant challenges in its risk management function. The bank’s risk framework, particularly its First and Second Lines of Defence, required urgent restructuring to address regulatory concerns. Key issues included:

• Weaknesses in ICAAP and ILAAP processes, posing a risk to solvency assessments.
• Deteriorating regulatory relationships, leading to heightened scrutiny.
• Gaps in risk governance, exposing the bank to operational and financial vulnerabilities.
• Lack of clear leadership, necessitating the immediate appointment of an experienced Chief Risk Officer (CRO).

With regulators demanding immediate action, the bank needed an interim CRO who could take control, rebuild trust, and implement a robust risk structure while preparing for a long-term successor.

Our Approach

Recognizing the urgency and complexity of the situation, we swiftly introduced a seasoned and well-respected Chief Risk Officer, known for their expertise in regulatory remediation and risk transformation. The approach was structured into key phases:

Immediate Assessment & Action Plan (Weeks 1-2)

• Conducted a rapid but thorough review of the Risk function, governance, and leadership capabilities.
• Assessed the current ICAAP and ILAAP documentation, identifying material weaknesses affecting solvency preparedness.
• Engaged with key regulatory bodies to understand their concerns and expectations, establishing a path to regain trust.
• Delivered a board-level independent report outlining key gaps, risks, and urgent remedial actions.

Risk Function Restructuring & Regulatory Confidence Rebuild (Months 2-6)

• Designed and implemented a new First and Second Line of Defence framework, aligning risk governance with regulatory expectations.
• Established clearer risk oversight mechanisms, enhancing reporting and risk identification across the business.
• Strengthened ICAAP and ILAAP processes to meet solvency assessment standards, ensuring full regulatory compliance.
• Facilitated direct and transparent engagement with regulators, demonstrating a proactive and corrective approach.

Leadership Succession & Long-Term Stability (Months 6-8)

• Led the search for a permanent CRO, ensuring long-term sustainability of the risk function.
• Managed a comprehensive handover process, embedding new structures, policies, and regulatory engagement strategies.
• Ensured a smooth transition, leaving behind a strengthened, regulator-approved risk function.

The Outcome

The regulator acknowledged the bank’s significant improvements, reducing ongoing scrutiny.

The ICAAP and ILAAP frameworks were fully aligned with solvency requirements, strengthening the bank’s risk position.

The new risk governance model ensured a robust First and Second Line of Defence.

A permanent CRO was successfully appointed, inheriting a structured, well-documented risk framework.

Delivered in just 8 months, this engagement transformed the bank’s risk function, restored regulatory confidence, and positioned the institution for long-term stability.