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Better Management, Control and Compliance
of Financial Stress Testing

PRIMED helps financial institutions manage their complex financial stress testing by providing a layer of control, risk management and governance across many the many lines of business and functions involved in these processes.

Better Understanding of process obligations, dependencies and workflows

Evidence-based audit & control

Real-time risk management and performance metrics

Alignment of process improvements to strategic objectives

 

BETTER CONTROL

Manage key controls and sign-offs, with full audit and transparency.

IMPROVED EFFICIENCY

Eliminate manual spreadsheets, cross-business workflow and notifications.

BETTER PRODUCTIVITY

Reduce emails by 99%, real-time risk and status reporting.

BETTER INVESTMENTS

Align process and control improvement investment to strategic objectives and operating KPIs.

REDUCED COSTS

Reduce headcount, faster risk reporting, identify process improvements.

Business Outcomes

 

Cost Reduction

Remove layers of administration and co-ordination by automating your workflow, communications and metrics reporting

Better Control

Better controls with real-time risk and change management, escalations and metrics, while having an audited and repeatable processes.

Process Improvement

Track performance metrics of business processes and track improvements over time against strategic objectives and Key Performance Indicators (KPIs).

Financial Stress Testing Regulations and Obligations

Financial Regulatory Landscape

Many financial institutions have a number of regulatory-mandated processes and reporting obligations that occur almost on a continuous basis. In Europe, the European Banking Authority (EBA) introduced the Capital Requirements Directive IV (CRD IV) which covers banks, building societies and investment firms, and comprises two sets of reports namely COREP (Common Reporting) and FINREP (Financial Reporting). In the United states, there are a few similar regulations for banking organizations with over $10billion of assets: Federal Reserve Bank (FRB)’s CCAR (Comprehensive Capital Analysis and Review) and the complimentary DFAST (Dodd-Frank Act Stress Test) that share some of the same demands upon financial institutions. In the UK, the Bank of England (BoE) has a stress-testing framework for banks and building societies that broadly follows the same principles as those from the EBA and FRB. For the insurance industry, European Union (EU)’s Solvency II Directive concerns the amount of capital that EU insurance companies must hold to reduce the risk of insolvency.

These regulations seek to test whether the financial institutions have sufficient capital (Capital Adequacy) to continue operations throughout times of economic and financial stress and that they have robust, forward-looking capital-planning processes that account for their unique risks. Further, they assess whether the institutions have sufficient capital to absorb losses and support operations during adverse economic conditions.

Business Impacts

Failing to meet the standards of the appropriate regulators examinations can result in significant regulatory fines, sever brand and reputational damage, potential for markets contagion and even potential restructuring of the company.

PRIMED Solves Key Business Challenges

 

 Complexity Vs Efficiency

Calculating capital adequacy, credit and counterparts credit risk, group solvency, market risk and preparing balance sheet, income statements and other financial disclosures requires a lot of co-ordination and data movement across lines of business and corporate functions.

 

PRIMED provides workflow and notifications across business and functional owners when activities have been completed, or when key control points and sign-offs are needed.

Repeating Cyclical Schedules

Depending on the regulation being followed, many of these obligations and processes need to be repeated on monthly, quarterly, semi-annual or annual basis. This means that financial institutions need to be constantly running through these cycles, and ideally improving their process performance.

 

PRIMED supports well-defined business processes that need to be repeated over time through templatized Runbooks.

Evidence-based Controls

Financial institutions need to demonstrate that they have the appropriate process controls, governance and compliance procedures in place to ensure that the results of the stress test are delivered on time, and with demonstrably accurate results. This requires good evidence-based controls while being effective in their analysis.

PRIMED tracks the execution of key controls, supports the documentation of the completion of specific tasks, and keeps an audit of all significant changes to tasks and their status.

Risk and Change management

It is imperative that risks, issues, blockers and other concerns are tracked closely to ensure that the process is effective, accurate and efficient. Further, being able to measure how the process is performing across each cycle will help identify opportunities to change and improve systems, processes, controls and governance.

PRIMED provides risks and change management that specifically ties into the stress testing runbook and its processes and activities. This allows full traceability of risks and issues against specific processes and organizations, while offering full transparency on where future process improvement and investment needs to occur.

Strategic Alignment

Internally, financial institutions need to be able to align Business-As-Usual (BAU) process improvement with change investment and group-wide strategic objectives and KPIs.

PRIMED provides full traceability of BAU process improvements through change projects to strategic objectives and Key Performance Indicators (KPIs).

Get In Touch

For more details on how we can help you engineer your business or information about our products, please email info@ide-international.com or contact us.