Cedrus Bank was founded in 2015 when Cedrus Invest Bank (CIB) completed its acquisition of Standard Chartered Lebanon from Standard Chartered Bank. Cedrus Invest Bank and Cedrus Bank together form the Cedrus Group and offer a diversified range of banking products and services across commercial, retail, private and investment banking. Along with the acquisition of Standard Chartered Bank, came the complexity of consolidating multiple systems, including systems related to compliance and risk management.

At the time of the acquisition, the bank was using multiple systems, data sources and conventional tools to perform the day to day activities of compliance and risk management which impacted the time consumed and in turn employee efficiency. This case study is a summary of how Cedrus Bank enhanced its compliance and risk management operations using Capital Banking Solutions (CBS) as a technology and solution partner.

With a clear objective of implementing a consolidated system characterised by flexibility, scalability, and reliability, Cedrus Bank realised CBS’s Capital Compliance suite to be the best fit solution. Further, Capital Compliance built on an open and scalable architecture is accompanied by robust deployment, comparatively lower TCO, local presence for the quick support and existing positive relationship.

For a financial institution which is of the size of Cedrus Bank, it was not easy to change core modules and processes, i.e., compliance and risk management of the bank. From compliance officers’ perspective, there is always a considerable and justified amount of hesitation to change the existing system, its operations, and the associated process. Since the beginning and throughout implementation CBS’s team of consultants deployed at the implementation site played a critical role to handhold the Cedrus Bank team, educate them and address all their concerns and queries to gain the initial trust and improve the bank team’s confidence on the solution.

The software suite implemented at Cedrus Bank, i.e., Capital Compliance v9 included the following:

Capital Compliance – Anti-Money Laundering (AML)

  • Follows risk-based scoring approach, supporting automatic and manual scoring
  • Predefined rules and scenarios with an opportunity to build Scenarios
  • Real-time filtering to ensure transaction credibility

The implementation was completed within four months and involved a total of 3 consultants from CBS who coordinated with Compliance Officers as a single point of contact from Cedrus Bank. The  implementation of Capital Compliance product suite was running in parallel with the core banking implementation, and hence, the system has to be made available along with the core banking system.

Following were some of the key benefits achieved from the implementation:

  • Automated risk scoring processes, behavioral client profiling based on defined scenarios
  • Detailed parameterization of the solution concerning triggers and alerts
  • Built-in workflow and integrated document management Systems
  • Advanced reporting and alerts management.

Any solution implementation is associated with a unique set of challenges. However, the key to success is in a collaborative approach to mitigate the challenges and eliminate potential risks. Following are some of the key challenges faced during implementation & an overview of innovative ways in which the challenges were mitigated from being potential risks.

Timelines: With about a total of four months in hand, there was no room for any delay or deviation from the implementation objectives. One of the major tasks was to complete the User Acceptance Testing (UAT) within one month and be able to validate the set-up. Cedrus Bank and the CBS team took this

up as a challenge backed by rigorous preparations for UAT concerning designing test strategy, test cases preparation and so on. A collaborative approach towards UAT preparation and execution helped in achieving the milestone.

  • People readiness: One of the critical success factors for any implementation, often overlooked, is the people readiness. Achieving success in all other areas but not getting people readiness correct would not bear optimum results. To address the same, CBS adopted the ‘train the trainer’ approach where

a group of people is trained first hand by the CBS team and, further, the training is passed on to a bigger group of users by Cedrus Bank trainers. With this, the people readiness was ensured in less than two months during implementation.

  • Adapting Workflow: Usually when a new solution is being implemented, adapting product workflow to the organization structure of the bank becomes a challenge. While addressing the associated challenges, the product/workflow undergoes customisation, which in itself is a potential risk. The more

the number of customisations, the harder becomes the maintenance in a live environment. With extensive parameterisation encouraged by CBS, the associated potential risk is mitigated, and Cedrus Bank requirements met sufficiently.

With the successful implementation, the platform addresses consolidation of applications with AML Profiling, FATCA and CRS all available at one place. The solution currently caters for assessing

risk with a total of 14 different scenarios for triggers and alerts using a combination of 10 KYC fields to determine an automated score. In conclusion, the integration of a new compliance and risk management solution platform with a Core Banking application has been beneficial in centralising and streamlining Cedrus Bank operations for flexibility, scalability and reliability.

KEY FACTS

Bank: Cedrus Bank

Headquarters: Dora, Lebanon

Asset size : $2 billion (2018)

Supplier: Capital Banking Solutions

Solution: Capital Compliance v9

Timeline: 4 months

by IBS Intelligence
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