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What We Do

Frameworks

3 Lines of Defence Consulting (3LDC) specialises in providing senior management and the relevant control teams with blended advisory and support services in the financial services sector to guide them through the complex requirements.   We facilitate and enable firms in terms of assessing, enhancing and implementing their frameworks.   This encompasses matching the broad range of the underlying client requirements, drawing on multiple skills sets.

The operation and implementation of effective frameworks, provides the best protection for senior management and boards in relation to their oversight responsibilities and liabilities.

Professionals

3 Lines of Defence Consulting is focussed on providing its clients with blended effective and practical delivery, by drawing on an extensive pool of experience.   We become your partner, finding the route to overcome your issues, meet your requirements and deliver solutions.

3LDC Sectors & Clients

3 Lines of Defence Consulting operates across the financial sectors advising and supporting clients.

How we help you

The focus is on being more that just an advisor or consultant.   It is about connecting the solos/pillars and building the bridges, so your firm can get to the right place.

The success of your business is 3 Lines of Defence Consulting’s overarching target through:

• the achievement of your objectives;
• customised solutions;
• the delivery of sound practices;
• the enhancement of your governance, regulatory and risk frameworks so they facilitate rather than hinder;
• identification and mitigation of risks;
• project execution;
• bridging senior resource gaps;
• developing, mentoring and supporting client’s teams and key staff;
• being your independent advisor;

What is the regulatory 3 three lines of defence model?

Summary:

The three lines of defence model is a regulatory approach to oversight and control.   It is recognised by the FCA, as an integral part of senior management’s toolbox, facilitating the appropriate oversight of a regulated firm’s activities.   The question both boards and senior management should consider is whether they believe the governance, regulatory and control frameworks provide them with sufficient comfort and protection.   The FCA’s Senior Management Regime and the emphasis on Conduct Risk (corporate culture and behaviours), places an ever increasing burden of responsibility on your senior team.   Ignorance is not a defence if something is subsequently found to have gone wrong.   Robust and effective frameworks, with clear responsibilities are a key element to providing that senior management assurance.

By way of background, we have set out below a brief summary of the FCA’s view on the three lines of defence model and how this fits into the governance and the regulatory frameworks.   3 Lines of Defence Consulting provides more than just the three lines of defence model, however, it forms core part of the overall service to our clients.

To paraphrase the FCA:

A strong "corporate" culture, good communication and clear understanding and a strong sense of risk awareness can provide comfort for senior management, when used in conjunction with this approach.   While, we have seen different interpretations of its composition the most common approach is for the three lines to comprise the following:

1. The first line is provided by the business units – comprising the business units, support functions and embedded operational risk staff.
2. The second line is provided by the risk management functions – comprising the operational risk management function and the compliance function.
3. The third line is the audit function

3 Lines of Defence Consulting as part of the business approach and service provided to its clients will help establish and enhance these frameworks for the positive benefit of firms.   To be truly effective the three lines of defence model must be embedded and integral to the normal running of the business.

We help our clients make the three lines of defence part of the firm’s DNA, along with the strong governance, supporting the “appropriate culture”, generate informative MI and create a positive outlook (control functions are not “just a cost centre”).   Sometimes this process can be a matter of simple adaptation, where as in others it might require significant re-engineering, in order to bring the firm into the right corporate cultural space.

Although the regulators will generally say they will apply their expectations to your firm in a proportionate manner, we all see the levels of expectation only ever increasing.   It is better to be in the right corporate cultural space and operate the appropriate framework, rather than be found to be lacking by the regulator, your investors, clients and the rest of the world.   Enhancements are good, whilst mistakes can be very painful, especially with the regulators 20:20 hindsight.

It may be an unlikely quote but it helps place everything in perspective - “If you think safety is expensive, try an accident.” Stelios (EasyJet)