IFRS 9 Compliance Liability

IFRS 9 Compliance Liability

Senior Management and Board of Directors:

Presenting our solution does not fully convey the significance of the work, technology or creativity concerning eCM Global’s RiskCALM₄ solution. The IFRS 9 regulation requires a great deal of information, technology and integration. You may think, “This system is way more than my financial institution needs to be compliant with this new regulation.”

However, if you have read or hired one of the big 6 accounting firms or reviewed any of the GPPC information as research on IFRS 9, you know the answer to that question— yes, you do need this type of automation to ensure that your institution is compliant with IFRS 9:

• If you want a risk model that is does its job in predicting for your institution
• If you understand the benefits in doing it right
• If you are concerned with the future of your organization
• If you want to explain variance to your regulators, etc.

The requirements incorporate your entire senior management: finance, risk management, compliance, lending, marketing, operations and the Board. The application of IFRS 9 and its impact must be explainable to the Board.

Let’s take the issues, as presented by the GPPC and accounting firms, one at a time and how RiskCALM₄ resolves them:

• (PwC) Pervasiveness of IFRS 9: “IFRS 9 impacts on lending, underwriting and pricing, accounting and reporting, capital and return on equity.”¹
  • We handle the underwriting of loans, automate the pricing and do all the loan documentation, ensuring data control and adherence to policy. At the heart of all of this is our IFRS 9 risk modelling and all associated calculations. With the automation we can easily identify the impact on capital requirements.
• (KPMG) Overrides of policy: “…In such circumstances, any type of overrides of components like PD, LGD, and EAD computed in the model are required to be approved by the respective authorities.” (Stakeholders).²
  • We’ve answered the tracking of overrides and the reporting of such through our automation of your IFRS 9 and lending policies with the ability to audit any changes and to alert the appropriate stakeholder, immediately.
• (KPMG) Data management: “… entities must ensure the sanctity of the data in the ECL model. Ensuring a single source of complete data…”³
  • We also store all data and identify what data applies to which risk model, to afford the comparison and analysis of models.
• (KPMG) Data warehouse: ” Banks shall adopt the concept of data warehouse in order to meet all the data requirements…”⁴
  • We dealt with the data management concerns, warehousing all pertinent IFRS 9 data in a single location, securing the sanctity of the data.
• (PwC) Data requirements: “The EL model is data intensive. Early effort is needed to identify data gaps and then consider practical solutions to collect and control the necessary data.”⁵
  • We dealt with the data management and gap concerns, warehousing all pertinent IFRS 9 data in a single location, securing the sanctity of the data and expanding the data capture routines within the automation, to close the data gap.
• (PwC) Data requirements: “How comfortable is the firm with the completeness and accuracy of loan level data?”⁶
  • Included is the assurance of loan level data because of the automation of your lending environment with the additional data requirements, closing the data gap and the warehousing of all data.
• (GPPC) Disclosures: “How will the IFRS disclosures requirements be met and how will those disclosures facilitate comparability?”⁷
  • We also identify what data applies to which risk model, to afford the comparison and analysis of models.
• (GPPC) Reporting processes: “How will reporting processes and controls be documented and tested, particularly where systems and data sources have not previously been subject to audit?”⁸
  • Included are automatic alerts to stakeholders at the time of the override, as well as an automated audit trail of all changes to policies, with controls and reporting.

These are a few of the issues our technology will resolve for your organization. We have also incorporated with the IFRS 9 solution a risk management capability for: AML, CFT, KYC, etc., an online customer facing presence for your lending and deposit environments, as well as an integrated marketing technology that will assist you in expanding your presence within your current markets, while protecting your organization against non-compliance with IFRS 9.

We believe our team will create an environment of partnership with you, staying in tune to your business requirements, as your business changes and grows.

Once you have determined you do need a partner who understands all of this and can help you overcome the obstacles, please ask for a personal presentation or consultation. We look forward to the opportunity to serve and grow with you.