Increasingly complex regulations mean financial institutions face many new requirements, complying with which may entail significant effort and expenditure. Challenges in adapting to new regulations often result from the lack of appropriate technology support due to existing legacy software or poorly integrated, dispersed functionalities or data sources. To compensate for these deficiencies, business processes in many institutions have become overly complicated and inefficient, often through the use of numerous error-prone manual tasks. The business and regulatory changes implemented in many

Capital Requirements Regulation (CRR) provides a single set of harmonised prudential rules which institutions throughout the EU must respect. In order to strengthen the resilience of the banking sector and make capital requirements more risk-sensitive, regulatory requirements are constantly being improved. New versions of regulations (CRD V / CRR II and Basel IV, SA-CCR, FRTB) are currently under discussion.

Challenges for Financial Institutions

Deloitte Fluent Capital Adequacy Software Solution

FluentDeloitte Capital Adequacy

environments over recent years have further negatively affected transparency and operational risk in the capital adequacy process. Deloitte has supported many financial institutions in implementing capital adequacy regulations, providing business advisory services (eg. support in quantitative impact studies and stress tests) and software implementation. This experience has confirmed that existing systems (stand-alone or operating on top of MIS/Data Warehouse, some even dating back to the early Basel II era) are often incapable of properly

supporting current regulatory requirements and business needs. In many cases, they do not provide enough insight into capital allocation or the effect of risk mitigation on capital requirements. This conclusion, shared by many financial institutions, becomes even more concerning in the light of upcoming regulations such as CRD V / CRR II and Basel IV, SA-CCR or FRTB.

Deloitte Fluent Capital Adequacy is a modern,

enterprise-class software solution developed

to enable banks to deal effectively with the

challenges posed by the current (CRD IV /

CRR) and upcoming (CRD V / CRR II, Basel IV)

Key FeaturesFlexible business parametrisation

Multi-bank, multi-regulator

Transparency, auditability and security

Stress testing support

Regulatory reporting

A solution that matches your scale and needs

Reliable and thorough support from the system provider

Very high performance

Powerful reporting and data analysis

Appropriately set-up parameters resulting from the current CRD/CRR regulations, including national options

Easily create new parametrisations or modify existing ones to assess impact of forthcoming regulations (Quantitative Impact Study)

Perform effective “what-if” scenario analyses by running and comparing results of multiple calculations with different parametrisations

Easily access all relevant regulatory parameters – no business parametrisation is hidden or hard-coded in the ETL process

Calculate and analyse individual or consolidated capital requirements for entities within a capital group

Define parameters for various regulatory jurisdictions to calculate capital requirements in accordance with national options (group consolidation)

Enables users to analyse the bank’s future capital position assuming different stress test scenarios

A set of built-in reports for Pillar III

Rich data model covering COREP dimensions and measures

Possible integration with external COREP/XBRL reporting solutions

While the system architecture is ready to scale-up to very large data volumes, if data volumes are moderate it does not require the most advanced and expensive editions of third party software

Relatively low hardware requirements while still providing high performance of calculations and reporting

Coherent set of technologies, well-integrated components and easy technical administration

As well as software license, implementation support and post-implementation services, we can also provide business advisory services related to capital adequacy

Pre-configured system in accordance with common requirements and assistance to address specific needs arising from local regulations

Feel safe – if you get specific recommendations from the regulator, which are not covered by existing system parametrisation options, we are ready to implement any necessary software customisation

Trace the calculation step-by-step for a selected exposure or entity, to understand and document how the final results were obtained

Have all input and output data safely stored in the system for future reference

Easily inspect and re-run historical calculations and reports

Have no worries about losing any data used for regulatory reporting – the system automatically saves and securely stores all data and configuration parameters used by each calculation process

Eliminate operational risks and stay compliant with applicable security procedures

Have confidence that all calculation and reporting processes are finished within the allowed time window

Quickly react to internal or external requests to re-run calculations or perform multiple “what-if” analyses

Be able to run reports spanning across a long series of monthly results to observe trends

Benefit from relatively low hardware costs

Enable business users to design their own reports and add them to the system

Aggregate, slice/dice, drill-through and visualise data within seconds using a predefined CAD reporting data model 1

Get even more thorough insight into the capital position and possible capital optimisation options by performing flexible reporting and dynamic data analyses

Deloitte Fluent Capital Adequacy Software Solution

capital adequacy regulations. Its functional

design draws on learning gained from

our experience in helping banks address

challenges posed by the regulations. Its

architecture brings modern technologies

to the software platform which we have

developed and successfully used to

implement various analytical solutions

for our banking clients.

1 Requires installation of the Fluent Data Exploration and Visualisation module.

fluent@deloitte.comwww.deloitte.com/pl/en/fluent 

Contact

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