Managed Services for risk, regulation, and compliance

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The financial services industry continues to face ever increasing regulatory, technology, and talent challenges across every facet of their business. Traditional operational models can no longer effectively support the demands of and, more importantly, the risk of non-compliance, keeping pace with fast-moving technology innovations, and a scarcity of qualified resources to support your business.

At KPMG, our Managed Services solutions go far beyond the classic models of labor arbitrage and transactional services. As your transformation partner, we walk with you through your ongoing journey.

Managed Services for Anti-Money Laundering (AML)

Data and reporting services

 

Loan processing services

KPMG Managed Services provides a comprehensive approach to support financial services organisations, taking on the non-core, but Board-critical, aspects of maintaining – and improving – your business. Our deep industry experience, leading talent, and technology expertise supported by a global delivery model allows you to focus on your transformation strategy and driving business growth.

Model Risk Management

Control Testing

 

Fraud

 

KPMG Risk Hub

KPMG Managed Services provides financial crimes solutions by combining deep domain knowledge, data management, analytics, and advanced technology to digitise policies, automate processes, and monitor high volumes of transactions—all packaged in a multi-year subscription offer with outcome-based pricing.

By taking responsibility for your AML operations, our Managed Services enable you to:

• Improve data quality and reduce false positive alerts
• Automate data collection from multiple sources to verify and enrich customer profiles
• Better understand your customers and improve their experience
• Expedite transaction review
• Increase process efficiency
• Reduce the cost of compliance
• Earn the trust of regulators, customers, and other stakeholders

Financial institutions are faced with the need to transform their data and reporting capabilities. Our clients rely on our cross-functional experience and technology-enabled approach to help them meet the demands of today's financial services sector—protecting the assets of and building trust among consumers, investors, and other stakeholders and addressing current challenges. Several trends are reshaping today’s regulatory and data and financial reporting environment, including:

Changing regulatory requirements

Regulators are rolling out additional reporting requirements in several different areas. For example, the SEC is considering a proposal broadening ESG reporting requirements and the CFBP recently changed reporting and data collection needs related to lending and the Community Reinvestment Act is in the process of being modernised.

Growing business complexity

Organisations are becoming more complex given the shift towards remote/hybrid work models, use of digital currency, threats to cybersecurity, labor shortages and market volatility. The complexity can pose challenges in organising and collecting data, implementing effective controls, and accurate and timely reporting.

Greater consumer interest in business transparency

Similar to the regulators, consumers are becoming more conscious and demanding transparency from companies in areas such as sustainability, data privacy and security, diversity initiatives, fraud detection, and more. This reporting can inform and influence consumers’ purchasing decisions.

Labor market challenges

The Great Resignation in 2021 led to labor shortages in the market. Additionally, workers are demanding more benefits and flexibility from their employers. These trends have made it harder for organisations to afford, find, and retain employees, potentially impacting their core business activities.

When a spike in loan originations due to low mortgage rates hit, many banks were challenged by a lack of skilled resources to support high and surging volumes. This has been compounded by an increase in loan modification requests from borrowers as the economy has adjusted. With continual staff turnover, lack of standard procedures, and limited capability to leverage technology, organizations need a managed service partner to provide the right-skilled, right-sized support as and when they need it.

KPMG Managed Services supports:

Our Surge capacity services can flex up and down to meet your needs with our multi-disciplinary teams that help organisations access short term, qualified professionals to manage swells in specialised work.

With access to over 200 trained resources, our ability to leverage deep industry knowledge helps banking and finance organisations meet these challenges and respond with opportunities to keep your teams focused on their core competencies.

Model risk is an ever-present occurrence when financial institutions use models, whether for pricing, risk management, or decision making in general. Following the financial crisis regulatory and supervisory scrutiny of this topic has increased considerably. Banks across the world are beginning to realise that they need to catch up to the high standards of model risk management (MRM) that is expected by the regulators and address these challenges:

• Absence of comprehensive model inventory

• Insufficient MRM governance

• Inadequate automation in repetitive processes

• Lack of standardized model documentation

• Rising costs of maintaining an MRM function

KPMG offers a wide range of MRM services to help address these needs. Through model validation (qualitative and quantitative), model reporting, our Managed Services teams can provide cost savings of 20 to 30 percent by accessing our model validation consulting experience, global delivery model, and validation workflow and reporting solution.

Financial institutions are often challenged in their controls testing and monitoring programs. Common issues include:

Using Managed Services for controls testing provides a sustainable, high-quality approach to managing controls testing and monitoring requirements and provides a more holistic view of enterprise risk management. Through a number of PMO activities, document requests management, and document testing, KPMG Managed Services can:

According to the FTC report of 2022, American consumers lost $8.8B to fraud in 2022. This number has skyrocketed from $2.6B in 2021. The bulk of this fraud occurs within the U.S. banking industry which accounted for $1.6B of that number and includes check fraud, online banking fraud, bank transfers, and payments.

Given the sheer number of increased fraudulent incidents within the industry, financial institutions are facing challenges to keep pace with the volume and frequency with which this activity is occurring. In addition, financial Institutions are required to file Suspicious Activity Reports (SARs) with FinCEN within 30 days of the activity being identified. FI Operations teams are under a lot of stress and are unable to keep pace with the sheer volume of fraud cases resulting in huge backlogs and often missing filing the regulatory deadlines on time.

We provide a scalable Managed Service to deliver cost savings to financial institutions. Our operational rigor coupled with robust MI reporting helps to drive significant efficiencies in these operations, while producing high quality deliverables. KPMG also works with FIs to enhance and optimise their technology to provide analytics and insights to help minimise fraud cases and increase operational productivity.