In daily study and work, everyone is familiar with the paper. Thesis is a tool to describe academic research results for academic exchange. Do you know how to write a good paper? The following is the risk analysis paper of custody business compiled by me for reference only. Let's have a look.
Properly handle the relationship between business development and risk prevention and control, and all custody business behaviors should adhere to the bottom line of risk compliance, which is the premise and condition for the development of custody business and the lifeline of custody business of commercial banks. It is necessary to strengthen basic management and implement it under the framework of custody business management system. All institutions of the custodian bank need to clarify the responsibilities of departments and posts, use scientific and effective business processes, manage people by system and manage affairs by process, and further enhance their risk management and control capabilities.
Abstract: Under the trend of financial disintermediation, the growth mode of commercial banks has gradually changed from capital dependence to low capital consumption. Asset custody business occupies less capital. In addition to stable custody fee income, it also increases stable fund precipitation, creates intermediate income, and creates joint benefits such as settlement and sale of foreign exchange. The business synergy effect is remarkable, and it has become the preferred strategic intermediary business for banks, and its comprehensive contribution has been continuously improved. Since 1998, the scale, service scope, customer types and market participation of asset custody business of commercial banks (hereinafter referred to as "custody business") have been increasing, which has put forward new requirements for risk management and control of custody business. This paper analyzes some risk points in custody business and tries to put forward relevant countermeasures, hoping to help the steady development of custody business.
Keywords: bank; Custody business; Risk; Stay alert
I. Introduction of Custody Business
(1) What is the custody business?
"Custody business of commercial banks" refers to the behavior of the custodian bank to perform the duties of asset custody, handle the agreed services such as fund settlement and collect relevant fees according to the legal provisions and contractual agreements. According to laws, regulations and contracts, the services provided by custodian banks can also include accounting and valuation, investment supervision, performance evaluation, investment management, comprehensive financial services and other asset services. As an important part of modern financial industry, asset custody industry has introduced custody mechanism into multi-level capital market, which has played an irreplaceable role in eliminating market information asymmetry, improving asset management and transaction efficiency, ensuring investors' asset safety and promoting the healthy development of the market. For commercial banks, the income from custody business is stable and does not occupy economic capital. In particular, due to regulatory requirements, custody assets need to maintain a certain proportion of cash assets to cope with various situations. Such assets often exist in the form of demand deposits, which have become rare stable large-scale high-quality deposits in the interest rate marketization environment. In addition, the custody business department can also establish a linkage mechanism to fully integrate internal capital, channels and projects to provide customers with a package of comprehensive financial services. Under the background of the "new normal" of China's economic development and facing the new market competition pattern, commercial banks have seen the advantages of custody business, spared no effort to strengthen investment in this "capital-saving" intermediary business, enhance the strategic position of custody business, and promote the transformation of business structure to light assets. By the end of June, 2065438+2006, the asset custody scale of China's banking industry exceeded one trillion yuan for the first time, reaching 103.5 trillion yuan, up 53.6% year-on-year. Since 20 12, the growth rate of asset custody in China's banking industry has always been above 50%, and it is on the rise year by year. While the scale of the industry continues to grow rapidly, the market participants are also expanding. At present, 27 commercial banks in China are qualified for Public Offering of Fund custody, among which the asset custody scale of Industrial and Commercial Bank of China, which ranks first, has reached 13 trillion yuan.
(2) Key points of custody business
Asset custody business mainly serves the asset management industry, and it is an important platform and link to connect the main players in the investment and financing market. Its key point mainly lies in the diversity of customers. In recent years, the rapid development of asset management industry has brought increasingly rich and diverse entrusted customer resources, from the initial single fund management company to insurance companies, brokers, QFII (qualified foreign investors), enterprises that have established enterprise annuities and so on. There are many types of services. Custody business mainly provides five basic services: asset custody, fund settlement, accounting, asset evaluation and investment supervision. It can also provide value-added services such as foreign exchange trading, corporate behavior, risk performance and accounting outsourcing. This often becomes the focus of the custodian bank's competition for customers. Covers a wide range. Custody business involves almost all kinds of investments in the capital market, covering domestic and foreign markets. It needs to face all the regulatory authorities of China's financial industry, from the People's Bank of China, China Insurance Regulatory Commission, China Banking Regulatory Commission to SAFE, and even the Ministry of Labor and Social Affairs. Complexity of operation. Custody business is characterized by a large amount of data, a variety of reports, complex market rules, a large number of customer orders, and high requirements for accuracy and timeliness.
Second, the risk points of custody business
With the deepening of reform and the steady development of the capital market, the custody business has also ushered in broad development opportunities, but it is also facing risks, with some potential problems and weak links:
(A) business system risks
At present, most custodian banks are using outsourcing custody business system. Due to historical reasons, centralized system management and data sharing cannot be carried out, and the degree of automation and batch processing ability are low. Under the background of rapid market growth, the system has been difficult to support and overwhelmed, and has been plagued by various patches accumulated gradually, which has become the bottleneck of business development. Can not meet the requirements of various emerging innovative products, greatly affecting business efficiency and quality, while increasing business risks. Due to the inherent system architecture limitation of outsourcing system, some personalized requirements cannot be realized, and customers often turn to other banks because the custodian bank cannot provide certain functional services.
(2) Operational risk
Operational risk refers to the risk of operational errors or violation of operational procedures caused by defects in internal control or human factors during the operation of each link of custody business. For example, because they are not familiar with the business system functions and process requirements, they operate before the data is ready, resulting in data errors; The input data is wrong, but the auditor did not check it out, and the operation was based on the wrong input data, resulting in an error; When the data is complete and correct, the wrong rules are assigned and the wrong functions are called, which leads to the wrong calculation results; The business system is shut down and cannot be used normally; Wrong classification, wrong classification without uniform standards.
(C) the risk of system construction
With the rapid development of the capital market, it is easy to have a vacuum zone. The management system and operating procedures have not yet formed a full coverage of the management products and processes, and the management system of individual new products needs to be improved and supplemented. Taking P2P hosting as an example, the existing system basically does not involve this field. After the regulatory change, the system has not changed accordingly, and some regulations are difficult to implement effectively. For example, the regulatory authorities have gradually abolished the approval system and changed it to the filing system. Without product approval, the branch cannot apply to the public security organ for engraving the custody products.
(D) Internal management risks
There are great differences in laws, regulations and supervision between different regulatory authorities. The regulations of China Securities Regulatory Commission may not be considered applicable to insurance assets. Similarly, it is not appropriate to directly adopt insurance laws and regulations to regulate enterprise annuities. Therefore, we must pay attention to the types of assets under custody and the regulatory authorities under our jurisdiction in order to achieve a targeted goal; It is difficult to meet the rapid development of business needs because of the shortage of business personnel. Facing the increasingly diversified requirements of custody business, the workload of custody business is increasing, and the requirements for employees are getting higher and higher, and the quality and ability of personnel need to be further improved; The access and audit mechanism is not clear, the branches handle business beyond their authority, and the contract signing is not standardized; Failing to perform the duties of the custodian in strict accordance with the contract.
(V) Reputation risk
In custody business, especially securities investment funds, if the error reaches or exceeds 0.5% of the fund's net asset value, it is necessary to disclose information in addition to being questioned by the regulatory authorities. For example, the custodian bank and the management company published a false announcement on the net value of ICBC (Switzerland) Becken Global Natural Resources Index Securities Investment Fund (LOF) in the newspaper. Once such an announcement is issued, it will be a big blow to the reputation of the custodian bank. There is a major failure in the custody business system, and an important data error in a certain link is likely to cause a wide range of errors, which will also cast a shadow on the reputation of the custody bank.
Third, the countermeasures of risk prevention
How to ensure the standardized operation of custody business and realize zero mistakes in commercial banks is a problem worth pondering. Effective measures should be taken to effectively prevent the risks of custody business from the aspects of system, system and management:
(A) strong business system support
Based on the actual business, independently develop a centralized and unified custody business system for the whole bank, standardize business processes, and strengthen business management and monitoring. Comply with the characteristics of the Internet finance era, strengthen the application of information and big data technology, and strive to ensure the stable operation of hardware equipment, accurate and reliable software application functions and data processing of the custody business system, and ensure the safety and effectiveness of information and data. Actively apply technical systems to achieve risk control, and embed risk control design into the system architecture layer. Achieve unified access to external data and unified management of internal data, effectively control data risks while reducing costs. There must be a fallback mechanism before the system is upgraded. If the problem is big, you should go back to the previous version, and you can upgrade again after the second interview is successful. When switching to the new system, we should set a long enough parallel transition period, find potential problems through parallel result verification, and correct and optimize them in time, especially check whether all risk control measures are in place and meet the requirements accurately and effectively.
(2) Standardize the operation and make unremitting efforts.
It is necessary to fully understand the performance risks of custody business and strengthen enforcement in performance management and standardized operation. Establish a reward and punishment mechanism to reward those who operate in a standardized way, operate cautiously and pay attention to preventing business risks, and give warnings and notifications to those who operate in violation of regulations and are irresponsible. In terms of error correction mechanism and business continuity, we should also make full preparations, formulate a complete emergency plan, and implement solutions in time once problems occur. Follow the principles of comprehensiveness, independence and effectiveness, and establish appropriate separate firewalls in business systems and post personnel to achieve the purpose of risk prevention. Business personnel are required to be clear about their job responsibilities, be familiar with system processes, avoid sequence errors or even omissions, implement a review and regular inspection mechanism for important data and parameters, and implement unified classification and operation standards and follow them. In terms of staffing, we should provide necessary personnel according to business needs and build a professional and high-quality trusteeship team.
(3) adhere to the system construction
The core of establishing an effective custody business management system is to formulate unified rules and regulations, so that there are rules to follow and evidence to follow. Where there is business, it is necessary to formulate corresponding specific systems, and it is impossible to form a lack of systems. On the basis of in-depth understanding of regulatory policies, regulations, product operation mode and related requirements, the first task is system construction. Establish a regular arrangement mechanism of the managed business system to check whether it is complete and whether it needs to be changed or modified. Be able to quickly respond to and logically analyze the information that affects the custody business in the market, especially for the changes in regulatory policies and the emergence of new products. We should do a good job in business impact analysis in advance, and do a good job in response, such as the analysis of the situation and supervision of third-party payment in Internet finance, and pay close attention to the supervision trend, which directly reflects the requirements of new laws and policies for custody business processes and system adjustment. Establish communication channels. Improve the reporting system of custody business problems, clarify the reporting path and procedures, and smooth the path to solve problems. If each institution has any problems or suggestions for improvement in its operation, it can find the specific person in charge and get feedback within the specified time limit. Avoid the situation that you don't know who to look for because of the division of responsibilities and unclear reporting path. To build a perfect custody business management system, it is necessary to unite the joint efforts of the entire custody bank.
(4) Strengthen basic management.
It is necessary to strengthen basic management and implement it under the framework of custody business management system. All institutions of the custodian bank need to clarify the responsibilities of departments and posts, use scientific and effective business processes, manage people by system and manage affairs by process, and further enhance their risk management and control capabilities. Strict implementation of rules and regulations, control measures in place. Check the product business. Don't blindly carry out business for products that don't have the conditions. We should consider whether we can take effective measures to ensure compliance, thoroughly understand regulatory policies, strengthen risk identification, and conduct business in compliance. Establish a regular self-inspection mechanism, be problem-oriented, self-discover and self-correct problems. It is necessary to carry out compliance self-inspection on a regular basis, especially in those areas that are prone to risks and have problems in previous inspections. It is necessary to intensify self-examination, find and correct problems in time, and effectively solve problems. Establish a bank-wide spot check mechanism. Increase the frequency of internal inspection, covering all aspects, especially pay special attention to the problems in the industry, do a good job of self-inspection according to the analysis, and do not make simple, low-level and repetitive mistakes. Establish inspection notification and inspection problem tracking system, and continuously track the rectification situation to ensure implementation. In particular, whether the problems found in the previous inspection have learned lessons or not have been seriously and comprehensively rectified. The weak links that have been found must be improved and filled.
(e) Compliance awareness is always strong.
Properly handle the relationship between business development and risk prevention and control, and all custody business behaviors should adhere to the bottom line of risk compliance, which is the premise and condition for the development of custody business and the lifeline of custody business of commercial banks. We must realize that the risk of custody business is not only related to personal career prospects, but also related to the reputation of commercial banks. We must adhere to the concept of risk control, improve our awareness of compliance management, and expand our business on the premise of standardized management. Strengthen compliance risk control education and vigorously advocate the concept of compliance risk control. Attach importance to training, strengthen the training of business personnel, organize various online or offline training courses, and improve the business ability of employees. To establish the necessary professional qualification mechanism, the person in charge of the institution must have the professional qualification of the fund to ensure that he is familiar with the policy requirements and basic concepts of the custody business. Conduct regular assessment, strengthen the compliance management awareness of all employees, make compliance risk control continuous and normal, and avoid incidents that damage the reputation of the custodian bank. Asset custody has become one of the emerging businesses with the largest development space and the widest innovation field for commercial banks. In order to better ensure the safety of funds and safeguard the rights and interests of investors, we must implement the principle of "standardized and efficient operation, independent operation and ensuring safety" to ensure the stable, efficient and safe operation of custody business.
References:
[1] Banking Association. Guidelines on Custody Business of Commercial Banks, 20 13[2] Banking Association. China Asset Custody Industry Development Report (20 16), 20 16.
[3] mirror. In the first half of the year, the asset custody scale of ICBC reached 13 trillion yuan [N]. Financial Times, 2065,438+06.
[4] Sun. P2P lending model and its supervision in China [J]. Financial Teaching and Research, 20 14
[5] Misannouncement of Fund Share Net Valuation [N]. Securities Times, 20 13
[6] Jiang Xianling, Xu Xiaolan. Current situation and supervision of third-party payment: observation from internet finance [J]. Reform, 20 14
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