The IFRS 9 final guidelines come into effect on the 1st of January 2018. These guidelines on Expected Credit Losses (ECL) appear to be more principles-based and...
The IFRS 9 final guidelines come into effect on the 1st of January 2018. These guidelines on Expected Credit Losses (ECL) appear to be more principles-based and are expected to replace the erstwhile IAS 39. This blog discusses the impact and challenges faced specifically by Financial Institutions (FIs), while IFRS 9 is not only confined to FIs. Based on various surveys conducted, it has been estimated that the new expected loss approach will result in banks’ provisions...
The IFRS 9 final guidelines come into effect on the 1st of January 2018. These guidelines on Expected Credit Losses (ECL) appear to be more principles-based and are expected to replace the erstwhile...
Model risk is not a new concept to financial services institutions. Financial institutions (FIs) make extensive use of models for strategic decision making and...
Model risk is not a new concept to financial services institutions. Financial institutions (FIs) make extensive use of models for strategic decision making and operational requirements. While FIs are willing to undertake model risk as a calculated risk for conducting their business, of late the regulators have started emphasizing the need for effective model risk management and governance. Supervisory Guidelines on Model Risk Management The Federal Reserve Board of the US...
Model risk is not a new concept to financial services institutions. Financial institutions (FIs) make extensive use of models for strategic decision making and operational requirements. While FIs are...
Early start today for the Compliance Forum on day two of Sibos which was three quarters full, a little surprising considering compliance is one of the main...
Early start today for the Compliance Forum on day two of Sibos which was three quarters full, a little surprising considering compliance is one of the main themes of the conference but maybe the 8 am start wasn’t the ideal time for Sibos delegates. The opening was moderated by The Economist’s Jonathan Rosenthal who introduced both Je-Yoon Shin, President of the Financial Action Task Force on Money Laundering (FATF), and Tai Boon Leong, Executive Director, Banking Department,...
Early start today for the Compliance Forum on day two of Sibos which was three quarters full, a little surprising considering compliance is one of the main themes of the conference but maybe the 8 am...
According to the Office of the Comptroller of the Currency (OCC), over the coming financial year, the US supervisor will be looking ever more closely at how...
According to the Office of the Comptroller of the Currency (OCC), over the coming financial year, the US supervisor will be looking ever more closely at how banks are adapting to evolving AML and cyber security threats, whilst maintaining strong governance and oversight processes and programmes, including documented gaps and timelines to close them. This follows similar messages and focus areas from global regulators such as the UK’s Financial Conduct Authority who earlier...
According to the Office of the Comptroller of the Currency (OCC), over the coming financial year, the US supervisor will be looking ever more closely at how banks are adapting to evolving AML...
Big data is a trendy topic right now, not only in financial services, but across all industries. However, it’s certainly not a new topic. Over five years ago,...
Big data is a trendy topic right now, not only in financial services, but across all industries. However, it’s certainly not a new topic. Over five years ago, The Economist magazine featured an article called The Data Deluge that explained how quickly the quantity of information in the world is growing and how hard it is to store and analyze this data. The author further explained the benefits of monitoring data (i.e. credit card companies identifying fraud) and the...
Big data is a trendy topic right now, not only in financial services, but across all industries. However, it’s certainly not a new topic. Over five years ago, The Economist magazine featured an...
With a persistent low growth environment, myriad of regulatory obligations and most banks running after a finite set of “good” customers, bank profitability is...
With a persistent low growth environment, myriad of regulatory obligations and most banks running after a finite set of “good” customers, bank profitability is under great pressure. One niche lever in the hands of the banker in such a challenging environment is pricing. Going by the business model in a competitive environment where a new entrant is expected to have very aggressive pricing, there is the strategy aspect for the other incumbents, who need to use price to retain...
With a persistent low growth environment, myriad of regulatory obligations and most banks running after a finite set of “good” customers, bank profitability is under great pressure. One niche lever in...
In 2013, the Bank for International Settlements wrote that many banks lack “the ability to aggregate risk exposures and identify concentrations quickly and...
In 2013, the Bank for International Settlements wrote that many banks lack “the ability to aggregate risk exposures and identify concentrations quickly and accurately at the bank group level, across business lines and between legal entities.” Translation? Financial institutions as a whole have become so complex and the products they sell have developed at such a rapid pace that their own risk infrastructure has not kept pace. FI’s systems don’t provide a true picture of...
In 2013, the Bank for International Settlements wrote that many banks lack “the ability to aggregate risk exposures and identify concentrations quickly and accurately at the bank group level, across...
When it comes to regulatory reporting, financial institutions feel increasingly boxed in. On one hand, the number, frequency, and complexity of reports...
When it comes to regulatory reporting, financial institutions feel increasingly boxed in. On one hand, the number, frequency, and complexity of reports continues to spiral, especially for global financial institutions. At the same time, regulators are strongly encouraging firms to spend more time on analysis and review, such as the U.S. Federal Reserve’s guidance that financial institutions spend 80% of the time allocated for regulatory reporting on analytics/reviews and...
When it comes to regulatory reporting, financial institutions feel increasingly boxed in. On one hand, the number, frequency, and complexity of reports continues to spiral, especially for global...
Following the financial crisis, stress testing has become a central means of determining capital need for banks and the approach is here to stay. The industry’s...
Following the financial crisis, stress testing has become a central means of determining capital need for banks and the approach is here to stay. The industry’s response to this new paradigm has been a frantic development of capabilities, focused primarily on the methodological techniques that underpin robust financial projections. As highlighted in Oliver Wyman’s ‘Stress relief: Are vended systems the answer?’, stress testing will only increase in complexity and many banks...
Following the financial crisis, stress testing has become a central means of determining capital need for banks and the approach is here to stay. The industry’s response to this new paradigm has...
