Citisoft, a leading global investment management consulting firm, has launched an exit strategy and planning service to help asset managers mitigate the risks of a forced or voluntary exit from an outsourcing agreement.
In its November 2013 thematic review into outsourcing, the FCA cautioned financial services firms about the inherent risk of outsourcing their key operations without more effective and timely business continuity plans. The FCA warned asset managers that they have inadequate contingency plans in place to deal with a failure of their service provider ('resilience risk') and inadequate oversight of their service provider ('oversight risk').
Cosmo Wisniewski, Director, Citisoft: "Many firms believe that they have sufficient oversight coverage, although documentation may not be up-to-date or complete. Most firms, however, believe that they have only limited resilience coverage and have not adequately considered the detailed strategy, plans, risks, costs and timescales that a voluntary or forced exit would require."
Citisoft has identified a defined list of the potential exit-planning options. In a workshop with the asset manager's senior management team, the consultancy will consider all of these options in both voluntary and forced exit scenarios. This will be followed by the development of detailed plans, documents and a recommended governance approach. With a huge number of transitions successfully completed, Citisoft has the experience to deliver this complex project meticulously and efficiently.
The Exit Planning service sits alongside Citisoft's recently launched 'KYO-40' (know your outsourcer) toolkit, a 40-day package designed to help asset managers fast-track their response to the FCA and other regulators' growing concerns about outsourcing oversight and resilience.
Steve Young, CEO, Citisoft: "The key point about exit planning is that it has value not only in the event that an outsourcer should fail. We consider other exit triggers, such as approaching the end of a contract or unsatisfactory outsourcer performance. In this way we are extending our existing KYO-40 oversight and resilience service. If an asset manager has no idea how it would actually leave an outsource provider and its outsourcer knows this, then the asset manager is at a disadvantage. Our Exit Planning service is about redressing that imbalance, providing asset managers with detailed plans and timeframes in order to migrate away from an outsourcer, should this become necessary."