Introduction
What is mstar bank?
MSTAR BANK is a fictitious bank used to illustrate MSTAR Structured Scenarios for Operational Risks.
OVERVIEW OF MSTAR BANK
MSTAR BANK is a universal global bank headquartered in New York, NY, and operating in 4 regions. MSTAR BANK generates approximately $25bn revenue per year and has 50,000 employees.
REVENUE BREAKDOWN
MSTAR BANK activity is decomposed into 4 main business lines and 4 regions. The business lines are :
• AM: Asset and Wealth Management
• CB: Commercial Banking
• PB: Personal Banking
• IB: Investment Banking
The regions are:
• NAM: North America
• EMEA: Europe, Middle East, Africa, with operations mainly in UK and continental Europe
• LAM: Latin America, with operations mainly in Brazil
• APAC: Asia Pacific, with operations in India, Hong-Kong and Singapore
The following table presents the revenue breakdown for MSTAR Bank at the Region, Business Line level (in $bn).
NAM | EMEA | LAM | APAC | TOTAL | |
---|---|---|---|---|---|
AM | 2,50 | 0,25 | 0,25 | 0,25 | 3,50 |
CB | 2,50 | 0,00 | 0,00 | 0,00 | 2,50 |
PB | 7,50 | 1,25 | 0,00 | 1,25 | 10,00 |
IB | 3,75 | 3,75 | 0,25 | 1,25 | 9,00 |
TOTAL | 16,25 | 5,50 | 0,50 | 2,75 | 25,00 |
The following table shows a more detailed revenue breakdown (in $bn).
NAM | EMEA | LAM | APAC | |
---|---|---|---|---|
AM | 2,50 | 0,50 | 0,25 | 0,25 |
Asset Management | 2,00 | 0,00 | 0,00 | 0,00 |
Wealth Management | 0,50 | 0,50 | 0,25 | 0,25 |
CB | 2,50 | 0,00 | 0,00 | 0,00 |
Business Banking | 1,50 | 0,00 | 0,00 | 0,00 |
Loans | 0,60 | 0,00 | 0,00 | 0,00 |
Deposits | 0,45 | 0,00 | 0,00 | 0,00 |
Savings | 0,45 | 0,00 | 0,00 | 0,00 |
Card Acquirer | 1,00 | 0,00 | 0,00 | 0,00 |
PB | 7,50 | 1,25 | 0,00 | 1,25 |
Personal Banking | 5,00 | 0,25 | 0,00 | 0,25 |
Loans | 2,00 | 0,10 | 0,00 | 0,10 |
Deposits | 1,50 | 0,08 | 0,00 | 0,08 |
Savings | 1,50 | 0,08 | 0,00 | 0,08 |
Card Issuer | 2,50 | 1,00 | 0,00 | 1,00 |
IB | 3,75 | 3,75 | 0,25 | 1,25 |
Banking | 2,25 | 1,50 | 0,25 | 0,25 |
Markets | 1,50 | 2,25 | 0,00 | 1,00 |
PERSONNEL
MSTAR Bank has 50,000 employees
REGIONAL HEADQUARTERS
The main regional locations of MSTAR Bank are shown on the table and map below.
NAM | EMEA | LAM | APAC | |
---|---|---|---|---|
Headquarters | New York San Francisco | London Frankfurt | Sao Paulo | Singapore Hong Kong |
Data Centers | Wilmington | Dublin | Sao Paulo | Chennai |
RETAIL BUSINESS
MSTAR Bank serves 12 million retail clients worldwide, with the following repartition:
NAM | EMEA | LAM | APAC | |
---|---|---|---|---|
#Retail Clients | 10 million | 1 million | 0 | 1 million |
#Card Issued | 18 million | 1 million | 0 | 1 million |
#Card Issuer Market Share | 2% | 0,4% | 0 | 0,4% |
ASSET MANAGEMENT
MSTAR Bank has $1tn assets under management in approximately 350 funds, of the following sizes:
AUM | #Funds |
---|---|
<1bn | 100 |
$1bn-5bn | 200 |
$5bn-10bn | 50 |
Approximately 200 funds can be considered to have an aggressive risk profile (exposure to stock markets above 50%).
In addition, MSTAR Bank administers 100 funds from third parties. The AUM of these administered funds is as follows:
AUM | #Funds |
---|---|
<1bn | 25 |
$1bn-5bn | 50 |
$5bn-10bn | 25 |
The revenue MSTAR Bank draws annually from asset management is $3bn, which is a ratio Revenue/AUM of 0.3%. This can be considered average, as PWC reports in 2018 (1) that:
• Fees for active management is around 0.5%
• Fees for passive management is around 0.15%
(1) https://www.pwc.com/gx/en/asset-management/asset-management-insights/assets/pwc-awm-revolution-pressure-on-profitability.pdf
IT AND SERVICES
CRITICAL SERVICES
The main services MSTAR BANK is providing to its clients are listed below
Service | Description |
---|---|
Merchant Cards | Acquirer services for merchants |
Customer Cards | Authorization services for cardholders |
Payments | Transfers and payment for all clients |
Trading | Trading orders for IB and individual clients |
Consumer Loans | Loan application service for retail clients |
Internet Banking | Online and mobile banking for retail and corporate clients |
DEPENDENCY TO DATA CENTERS
Data Center | Description | Daily dependent revenue |
---|---|---|
Wilmington | Serves 90% of the EMEA Business | $50m |
Sao Paolo | Serves approximately 80% of the NAM Business | $20m |
Chennai | Serves the LAM Business, and a fraction of the NAM business | $15m |
Dublin | Serves the APAC business and a fraction of the EMEA business | $15m |
DETAILS ON PAYMENTS
The following table provides the details of payments processed by MSTAR Bank in the different regions daily (in $bn).
NAM | EMEA | LAM | APAC | |
---|---|---|---|---|
Payment Settlement System | FEDWIRE: $100bn CHIPS: $60bn | BACS : $10bn CHAPS : $40bn TARGET2 :$10bn | SWIFT : $5bn | FPS : $25bn |
TOTAL | $160bn | $60bn | $5bn | $25bn |
End of MSTAR BANK - OPERATIONAL RISK EXPOSURES REPORT