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?
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.
For more information about AxiomSL’s IFRS 9 solution, download the PDF.
AxiomSL’s End-to-End IFRS 9 Solution
Fetches and aggregates the necessary financial, risk and macro-economic data, without duplication to satisfy IFRS 9 regulatory requirements.
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For more information about AxiomSL’s IntegratedModelView, download the PDF.
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