Four steps to risk management following a high profile financial services failure or scandal

The financial services sector has really been through the mill these last few months. Starting with the fall of crypto exchange FTX, then Silvergate, Signature, Silicon Valley Bank and most recently Credit Suisse, there is still great uncertainty in the market.

As a due diligence platform, we work with some of the world’s largest institutional investors and whilst we largely stay focused on the technology, we can help our clients in times of crisis.

A short while ago all of our clients were concerned when things started to unfold for SVB and other regional or specialized banks. Their boards and end investors wanted to understand the risk impact of the bank collapse on their own firm.  Luckily with our tool, our clients had everything they needed to understand their own levels of risk for this specific situation and anything else the market might throw at them.

Our clients take four important steps in a risk management situation:

1. Understand what data you have, how accurate it is and what you are missing

   Using Dasseti Collect, gather and organize data by any type of entity, such as by manager or GP, but also vendors and service providers.  They can also organize data down to the Product (fund level). 
   Everything held on our platform is data so users can easily see Primary Custodian and Primary Bank as data fields.  
   
   Clients can also take any data field from sources like 3rd party databases like eVestment, Form ADV, or data we provide, alongside the data they collected from RFPs and DDQs issued from our platform.  No matter how the data was collected it can complete the picture for our clients.
   
   

2. List the gaps in your data

   In the case of a bank failure, for our clients the first order of business is to see if there are missing data points for any manager.  
   
   Next, check how old the data is. When it was last updated?
   
   This is a simple filtering of the bank related fields for dated or missing date.  With the list of missing data points, our clients can quickly create a list of companies, they need to contact to fill the gaps, and we help with that as well.
   
   
   

3. Send out a targeted questionnaire for just the missing information

   Next clients can send a new request for missing data directly for each manager. 
   Our clients can review many dozens of industry best practice questionnaires alongside their own custom questionnaires.  Luckily for our clients Dasseti offers a Tier 1 Service Provider questionnaire that covers all key banking related 3rd parties. If clients select the questionnaire they can review the invitation email that will be triggered, along with reminder emails that will send automatically.
   In just a few clicks we add and invite managers, and we’re done. The requests have been sent and our clients can wait for the results to come in, in real time. Any managers that work with banks that have been flagged in the questionnaire will trigger a red flag, so it’s quick and easy to pinpoint the at risk firms.
   
   

4. Analyze the full data set

   With a complete picture of vendors and third parties, our allocator clients can see how many managers are at risk and the notional value of the risk.
   It’s quick and easy to export the results to a branded document or report that can be shared easily with the board or other stakeholders.

We believe if you have the right tools you can future proof your due diligence process and be ready for any market event.   This means you can understand your risk faster and react more appropriately in a timely fashion. 

Get in touch to discuss due diligence in more detail and to see Dasseti Collect in action.