Execution Risk Management at Wachovia Yousef Valine

Transcription

1 Executio at Wachovia Yousef Valie Head of Istitutioal Group ad COO, Wachovia Corporatio 1

2 Ageda Why We Care About Executio Our Approach Accomplishmets Aligmet with AMA ad Operatioal

3 Why We Care About Executio We have may large iitiatives goig o at oe time across the compay. We geerally average betwee 0 to 80 i-flight high risk iitiatives durig the year. O average, we sped betwee $1.5B to $.5B o projects over the course of a year. We must be sure to sped this moey wisely. Coect projects with orgaizatioal strategy Whe we do ot focus o Executio the impact ca be sigificat: Customer Impact Demoralized Employees Process Breakdows Project Delays 3

4 Our Approach We established a distict risk disciplie aroud Implemetatio as a part of our risk goverace structure. Board of Directors Seior Committee Operatioal Committee Goverace of Executio is maaged through Implemetatio Support Busiess Uits CMG GBG CIB Wealth Fiace HR & CR Techology Operatios Busiess Cotiuity Plaig Compliace Fiduciary Fuctioal Areas Fiacial Huma Capital Implemetatio Legal Loss Supplier Techology Busiess Process Iteral Audit Regulators Marketig Other 4

5 Our Approach Established a distict risk disciplie aroud Implemetatio as a part of our risk goverace structure. Implemetatio risk goverace Portfolio maagemet Executio oversight Lessos leared Ivestmet ratioale Collaborated with our Fiace group to create a eterprise-wide ivestmet goverace structure Established Ivestmet Review Board (IRB) at both the eterprise ad lie of busiess level Supported by uiform policies, processes ad procedures 5

6 Accomplishmets Created a high degree of trasparecy ito all project-related ivestmets across the eterprise over $50,000 Reduced project sped from $.8B i 005 to $1.4B i 007 Improved trasparecy ad decisio-makig regardig delayig projects experiecig difficulty Improved capability to idetify ad maage project risks at the portfolio level Icreased our uderstadig of resource allocatio Itroduced stadardized goverace procedures at the lie of busiess level where the decisios are more likely to be resposive to customer eeds Icreased cross-orgaizatio collaboratio ad support, reflectig o our value of teamwork

7 Aligmet with AMA ad Operatioal Wachovia's Operatioal Framework leverages ad aligs parters across all of our fuctioal risk areas ad major lies of busiess. Support Busiess Uits CMG GBG CIB Wealth Fiace HR & CR Techology Operatios Marketig Other Busiess Cotiuity Plaig Compliace Fiduciary Fuctioal Areas Fiacial Board of Directors Seior Committee Operatioal Committee Huma Capital Implemetatio Legal Loss Supplier Techology Goverace of Executio is maaged through Implemetatio Busiess Process Iteral Audit Regulators 7

8 Aligmet with AMA ad Operatioal Executio risk is built ito all compoets of our Operatioal Framework Operatioal Framework Corporate Operatioal Moitorig ad Oversight Iteral Losses related to Implemetatio are categorized to facilitate aalysis Iteral Loss Data Scearios are developed specifically related to Implemetatio Sceario Aalysis $ Implemetatio related questios are a formal compoet of Busiess Eviromet Questioaire Busiess Eviromet OpRADAR Capital Implemetatio related losses experieced by our peers are collected ad aalyzed Assessmet of Cotrols related to Implemetatio Exteral Loss Data Cotrol Eviromet Aalysis Issues related to Implemetatio are captured i cetralized issues database. Issues Database Reportig Implemetatio risk is rated explicitly ad iteral ad exteral losses associated with implemetatio risk are reported ORM Uiform Decisioig Process (Not Market,Not Credit ) Uiform Decisioig Process Accept Mitigate Hedge All processes ad tools will be built based o a commo risk category ad cotrol objective taxoomy 8

9 Aligmet with AMA ad Operatioal Sceario Aalysis ad Capital Quatificatio Sceario Aalysis Workshops are coducted at the divisio level Implemetatio risk is a stadard sceario The Implemetatio Fuctioal Area (FRA) leader will support the divisio level workshops ad is a required participat i the cross-divisio review of sceario results Sceario Aalysis Workshops performed at each divisio Geeral Bakig Group Capital Capital Sceario 1 Capital Sceario Sceario 1 1 Capital Sceario 1 3 Sceario Capital Sceario Capital Sceario Implemetatio 1 3 Sceario 3 Sceario 1 Sceario Sceario Implemetatio Implemetatio Sceario Sceario Sceario Implemetatio Sceario 3 5 Sceario 5 Sceario Implemetatio 3 Sceario Sceario Sceario Implemetatio Sceario 5 Implemetatio Sceario Sceario 7 7 Sceario 5 Sceario Sceario Sceario 5 7 Sceario Sceario Sceario 7 Sceario 7 Sceario 7 Sceario Sceario Cross-Divisio Review Capital Model $ Loss Data Fuctioal Area Leader 9

10 Aligmet with AMA ad Operatioal Sceario Aalysis Implemetatio risk has a dedicated sceario icluded i the aual sceario aalysis process. Geeral Bakig Group Sceario 1 1 Sceario Sceario 3 3 Implemetatio Sceario 5 5 Sceario Sceario 7 7 Sceario 4 Implemetatio Descriptio The risks associated with covertig ad itegratig people, systems, ad processes i chage evets icludig Wachovia mergers/acquisitios/divestures, coversios, ew projects, ew products/services, process chages, or outsourcig activities. The risks associated with implemetig off shorig activities are icluded however the risk associated with o-goig off shorig activities is ot icluded. This risk does ot iclude Wachovia's role i advisig or supportig cliet merger activities. Frequecy Applicable Impact $1MM - $10MM $10MM - $50MM $50MM - $100MM $100MM - $50MM $50MM - $500MM > $500MM No. of Evets Time Frame The umbers are for illustrative purposes oly 10