International Financial Reporting Standards 9 (IFRS 9)

Provides the controlled environment needed by accounting and flexibility needed by risk to meet regulatory standards and strengthen risk perspectives


Overview


Disparate Data and Models

Banks face a major challenge sourcing and integrating the disparate data required for International Financial Reporting Standards (IFRS) 9. Most data will come from risk and finance, two functions that historically have operated in isolation from one another, applying different standards to the data they use.


In addition, banks’ provisioning requirements are likely to be greater under IFRS 9 than under IAS 39, since the new standard includes multiple instances under which expected credit losses (ECL) must be assessed for lifetime instead of for one year, or under volatile forward-looking scenarios.

Questions to Consider

  • Can we sustain the high operating costs associated with owning and maintaining models dispersed across siloed business functions and written in various modelling languages?
  • Can we define what is the “significant increase in credit risk” that triggers the change of the ECL calculation?
  • Are we able to calculate ECL over 12 months and/or the lifetime of assets?
  • Are we able to assess credit risk until the maturity of transactions/portfolios?

  • Can we explain discrepancies between ECLs on current and previous reporting dates by events such as staging transfer, new or derecognized, risk parameters change, and FX effect?
  • Do we have the capability to include forward-looking elements into multiple probability weighted scenarios?
  • Are we able to efficiently incorporate our model data and outputs into our regulatory reporting?

Thought Leadership: Traversing the Intricacies of IFRS 9 Implementations

Solution

Controlled Environment

AxiomSL’s end-to-end IFRS 9 solution delivered on its data integrity and control platform, ControllerView®, provides both the controlled environment required by accounting and the flexibility required by risk that directly impacts banks’ ability to satisfy regulatory requirements and strengthen risk perspectives enterprise wide.

Capabilities

  • The IntegratedModelView platform-native module enables direct incorporation of open-source language model inputs and outputs and integrated access to other closed-source models.
  • Flexible user controls facilitate collaboration across functions and support BCBS 239-driven sound data governance practices.

  • AxiomSL’s platform fetches and aggregates necessary financial, risk, and macro-economic data without duplicating data thus avoiding ETL layers.
  • Its extensible CreditView data dictionary enables IFRS 9 data quality and LineageView enables transparency and auditability.

Device Frame

For more information about AxiomSL’s IFRS 9 solution, download the PDF.

AxiomSL’s End-to-End IFRS 9 Solution


AxiomSL’s End-to-End IFRS 9 Solution

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For more information about AxiomSL’s IntegratedModelView, download the PDF.

Benefits

Provides model access, control, and flexibility via IntegratedModelView capabilities on the ControllerView platform that informs decision making and enables collaboration across functions

Automates classification and measurement of assets and liabilities

Facilitates scenario testing

Calculates ECL both transactions and portfolio levels

Seamlessly aggregates multiple data sources from risk, finance, asset liability management (ALM), and economics supported by AxiomSL’s extensible CreditView data dictionary

Integrates whole or part of an end-to-end IFRS 9 solution and naturally embeds regulatory requirements such as BCBS 239 in a single platform

Provides generic ability to drill down any result produced at any time and delivers data lineage for traceability and auditability

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