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Reinventing the Financial Services Value Chain.

Reinventing the Financial Services Value Chain.

IBOR Transition Services

The challenge that banks face to transition from IBORs to new ARRs by December 2021 requires a complex transformation plan and active controls to resolve the major hurdles. Regulators are challenging banks to evidence transition programme progress.

Insights

  • Delta Capita Whitepaper (July 2019): Transition Challenges of IBOR Replacement (‘Into the Unknown’)
  • Moving from unified IBOR to multiple ARR (Alternative Reference Rate) solutions presents both an Opportunity and a Threat to Financial Organisations.
  • Detailed plans need to be in place to (a) Develop replacement New ARR-based Products to remain competitive, and (b) Resolve the substantial back-book of legacy transactions that do not have effective fallback or trigger provisions ahead of YE 2021.

Latest Views

How Delta Capita can help

IBOR Transition – Core Delivery Services

Delta Capita have a range of services to accelerate delivery for our clients across the following areas:

  • Programme Design & Governance: Most banks have initiated pockets of activity on IBOR, in many cases on a federated basis and focusing on the more obvious activities. In many cases the group accountable exec has limited visibility into the programme status or a complete view across all delivery areas at risk. Delta Capita has vast previous experience of supporting global programme design and governance function that will bring tighter controls, reporting and budget oversight for the programme.
  • Delivery – PMO and Project Management: The data needed to understand completeness, run rate, costs and risk management requires aggregation across multiple products, functions, operating units, geographies and transition teams. Delta Capita has an agile, easy to deploy cloud-based PMO and Project Management solution. It integrates with legacy project/timesheet applications to manage day to day execution in one place, in real time. This approach streamlines and vastly simplifies the PMO office across such a broad topic. Reporting to regulators can be timely and complete.

Additional Service Capabilities

  • Risk and Quant Analytics: There is a requirement to model the potential outcome scenarios as the new ARRs become more liquid and new products are created. This modelling needs to be reflected in group risk models (analysis of curves, convexity and portfolio impact analysis), by client segment and product. Delta Capita has an innovative new model and risk methodology that can provide the risk and model validation outcomes identified. Additionally, Banks have identified divergence and contract risk between signed agreements and transactions captured in books and records. Delta Capita’s ‘Valuation Delta’ Approach addresses this risk (see graphic).
  • Contract Digitisation, Analysis and Repapering: Delta Capita’s Insight supports bulk contract digitisation and extraction of economic terms to reconcile against books and records. The outcome is clear exposure and risk information that can be presented in a dashboard for management reporting. As a quick-to-deploy model the solution can provide rapid time to value.
  • Conduct Risk: The BoE and PRA have highlighted the need for controls on client advisory and impacts of the new ARRs. In order to avoid conduct risk exposure a full audit trail and governance process is needed to capture and report on all external communication in order to de-risk the messaging model.

Head of Wealth Management & Insurance
Bimal Umeria

Bimal Umeria

Commercial Manager
Julian Eyre