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CECL/IFRS 9 Application

Why do we need it?

While the effective date for the financial institutions to become IFRS 9 compliant is 1st January, 2018, CECL is expected to be effective from 1st January, 2020. The implementation of IFRS 9 / CECL is not a pure accounting journey and is envisaged to create a closer integration of the Business, Risk Management, Finance, Treasury and IT.

Our clients have been using the CECL/IFRS 9 application to calculate expected losses across every portfolio and product level. It enables them to consolidate data, build robust modelling methodologies, and furnish key reports in a seamless yet efficient way.

"The key merit of the application is its scalability. On the one hand, it can be implemented for all portfolios like Corporate and Retail. On the other hand, the solution can be extended to all products such as Credit Cards, Home Loans, and Auto Loans to name few."

Features

CONFIGURATION

  • Consolidate data across business, risk, finance, treasury and IT.
  • Pre-configured data quality check and data preparation capabilities.
  • Allows management of model risk and model recalibration easily without any coding, with all parameterization transparent, accessible and auditable.
  • Is infrastructure lite and non-disruptive, allowing implementations with minimal IT support, while leveraging existing modeling assets and infrastructure
  • Manages versions for auditability and result repeatability that allows for efficient regulator and auditor engagements
  • Easy transition from prototyping to full blown implementation and from data centre to cloud deployments.
  • Easy transfer of user access enables multiple teams to work simultaneously.

Interact & Explain

  • Provides a comprehensive suite of methodologies for a wide array of portfolios and products.
  • ECL calculation is a multi-level sequential process. The entire process is automated starting with the estimation of various risk parameters such as PD, EAD, LGD, Maturity, to name a few and ending with the final expected loss calculation.
  • Manages and controls every step of the computation process and supports comparison of results across time, methodologies and scenarios.
  • Interactively computes all champion/challenger models at the most granular level
  • Provides optionality to choose methodologies based on desired sophistication, portfolio materiality and business user judgment.
  • Attribution analysis to explain changes between various ECL runs. Ability to attribute changes to portfolio shifts, risk parameter changes & residual tenor changes.

Report

  • Automates reports, reconciles impairment loss and financial statement disclosure reports.
  • Interactive visualization in the form of Tables, Charts and Graphs which interact seamlessly to provide a holistic view of impairment loss measurement
  • Workflow tool improves process transparency, as well as audit, validation and regulatory response times
  • Defines and automates key decision steps, approval rules, alerts and notifications
  • Export the computed results for further analysis and use by third-party BI tools.