Financial Stress Testing
Better Controls, Productivity and Compliance.
Business Outcomes
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.
Productivity & Efficiency
Remove layers of administration and manual reporting.
Better process co-ordination and communications.
Real-time metrics reporting and tracking.
Better Audit & Control
Evidence-based controls
Real-time risk and change management
Audited and repeatable processes.
Process Improvement
Business processes performance metrics
Align process improvements to strategic objectives and Key Performance Indicators (KPIs).
Better workflows and issue management.
Financial Stress Testing Runbooks
Manage and control your end-to-end business process for financial stress testing. Model key business processes, control points, sign-offs, responsibilities. Track next steps, lagging tasks, blockers, risks, issues and change requests to business processes
Understand Risks, Challenges and Blockers
Track risks, issues and performance of your business workflows and processes. Understand where complexities, dependencies and blockers are causing the stress testing process to breakdown or slow down.
Understanding Roles and Accountabilities
Model and control who is responsible and accountable for key business processes and tasks across your business workflow. Build out RACI matrices that are dynamic based on process steps and business functions assigned to those steps.
Operational Runbooks
Build up a suite of operational runbooks that can be implemented as needed for different purposes. Run annual, quarterly or monthly runbooks to meet specific business needs. Monitor overall portfolio investment and delivery status across operational and strategic change work streams.
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 from multiple authorities and jurisdictions.
- EU: European Banking Authority (EBA): Capital Requirements Directive IV (CRD IV) comprises Common Reporting (COREP) and Financial Reporting (FINREP). Solvency II Directive.
- United States: Federal Reserve Bank (FRB)’s Comprehensive Capital Analysis and Review (CCAR); Dodd-Frank Act Stress Test (DFAST)
- United Kingdom: Bank of England (BoE)’s stress testing framework aligns broadly with the EBA and FRB requirements.
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.
BETTER CONTROLS FOR FINANCIAL STRESS TESTING
24 October 2017
PRIMED FOR REGULATORY COMPLIANCE
14 June 2017
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).