Citisoft, a leading global investment management consulting firm, has launched a 40-day service to help asset managers fast-track their response to the FCA and other regulators’ growing concerns about outsourcing oversight.
Last year the UK’s Investment Management Association (IMA), together with a number of asset managers, outsource providers and consultants, formed the Outsourcing Working Group (OWG), which has been looking at providing an industry response to the regulator’s thematic review, including guidelines in respect of oversight, standardisation and exit planning. This is a growing area of interest for other regulators and Citisoft believes that improved outsourcing oversight will become a key objective for the global investment management industry.
Steve Young, CEO, Citisoft commented: “We have developed a robust toolkit that can be used to assess, identify and manage the oversight issues, including those laid down by the FCA. The service, called KYO-40, delivers: a risk analysis report highlighting exposure to outsourcing failure and geographical risk; a quantitative measure of oversight effectiveness; and baseline metrics for ‘what if’ analysis. This toolkit, alongside our defined engagement model, allows us to complete a sophisticated review of a firm’s outsourced operational processes - all delivered within 40 days of engagement, for a set fee based upon the size of the firm. KYO-40 will demonstrate consistency and high standards of oversight across all outsourced activities and geographies. The service can include a periodic review subscription,”
In its November 2013 thematic review into outsourcing, the FCA cautioned financial services firms about the inherent risk of outsourcing their key operations without more effective and timely business continuity plans. The FCA warned asset managers that they have inadequate contingency plans in place to deal with a failure of their service provider (‘Resilience risk’) and inadequate oversight of their service provider (‘Oversight risk’).
“In addition to supporting the outline OWG requirements, KYO-40 includes market best practices, standards and metrics based upon Citisoft’s deep experience within the asset management industry. Our new service will accelerate delivery and concentrate value, allowing asset managers to address the FCA's concerns as efficiently as possible," says Young.