23 Oct A Basel Journey Success Story — How A Japanese Financial Institution Implemented an RWA Calculation and Reporting Solution
The Basel III framework requires financial institutions to maintain capital coverage and hold liquid assets to safeguard solvency and financial stability during economic stress. Regulators require financial institutions to calculate risk-weighted assets (RWA) and regulatory capital.
Systems lacking clear data architectures obfuscate calculations. Without transparency into risk data and calculations, firms’ analytic and regulatory compliance foundations are weak and cannot support astute regulatory capital decision making.
A Japanese financial institution unhappy with another vendor’s slow processing and black-box-like architecture turned to AxiomSL for a system makeover. Its old ecosystem made it impossible to trust its results for RWA calculation and reporting. Because rules were not visible or present in the firm’s opaque solution, its analysts often had to investigate forensically, digging through email layers to surface authorized rules.
AxiomSL’s team jumped in and facilitated intensive requirements-gathering workshops collaborating with the client to identify all products for regulatory-capital purposes. The team then implemented the ControllerView® data integrity and control platform and regulatory capital calculation solution. Powered by the unique extensible CapitalView data dictionary architecture, the solution mapped the client’s data to Basel-III classifications, populating the RWA data layer while preserving the client’s native source data. The RWA calculation and reporting solution results appeared alongside corresponding inputs, providing transparency and improving audibility.
Now, by leveraging the platform’s visual business rules methodology the client can directly create and change rules as needed without IT intervention or forensic digging and the system documents those changes in real time.
In addition, implementing the solution has heightened the client’s ability to identify opportunities to fine-tune regulatory capital, satisfy regulatory requirements and audits, and inform business decision-making with enterprise-wide impacts.
Learn more about how AxiomSL’s regulatory capital RWA calculation and reporting solution helped this Japanese financial institution succeed in establishing a capital risk management ecosystem:
- Rethinking Risk Data Management And Technology In The Face Of FRTB: The COVID-19 Reprieve As An Impetus For Japanese Banks
- Act Two: Liquidity Risk Stress Testing Scenarios – Dealing With Odile, That Villainous Black Swan
- Data Lineage And Basel Reporting In The Age Of COVID-19: To Keep Your Car Running Smoothly, You Need To Look Under The Hood