05 Nov Success Story: A Large EMEA-Based Financial Institutions Deploys IFRS 9 Solution
Complying with International Financial Reporting Standard IFRS 9’s credit-risk analytics and credit-impairment requirements has forced financial institutions to change how they organize and examine their credit data because of the potential for higher provisioning assessments and other nuances. Furthermore, reconciling the CFO’s assets/liabilities perspective with the CRO’s risk/portfolios perspective has demanded that firms articulate and reconcile their data differently.
Executives and regulators alike need to understand the methodologies that underpin expected credit loss (ECL) calculation for IFRS 9 reporting. This demands data and credit model transparency.
A large EMEA-based bank is a case in point. The bank utilized a third-party built IFRS 9 solution that relied upon black-box credit models and processes. Recognizing that its solution was highly opaque and unsustainable, and under the impetus of an internal enterprise-wide initiative to drive strategic transparency, it turned to AxiomSL.
AxiomSL’s IFRS 9 solution running on the ControllerView® data integrity and control platform provides a flexible, end-to-end automated process that includes risk data and credit-artifact capture, credit model management and execution, aggregation, quality checks, ECL calculation, general ledger postings, reconciliation, and reporting.
The most impactful part of the bank’s implementation plan was its strategic decision to convert its black-box credit models to open-source language models. By doing so, the bank can house, manage, and execute its credit models directly on the platform leveraging IntegratedModelView’s capabilities.
With transparent access to all its credit data and models in one ecosystem, the bank was able to reevaluate its assumptions, gain insight into ECL results, accelerate the time and effort needed to satisfy IFRS 9 regulatory reporting requirements, and easily defend audits.