Regulatory Reporting - IFRS 9 & CECL
Our specialist team has the experience of repeat client engagements and deep relationships with academics, professionals and auditors. We are well equipped to understand your unique regulatory requirements.
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We provide the tools and reports needed by accounting and finance professional to meet various accounting and regulatory standards.
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Our IFRS 9 ECL (and FASB CECL) models and reports provide significant insights to improve risk management and to satisfy auditors and other regulatory requirements.
Auditors
We assist auditors in performing IFRS 9 ECL estimations for their clients, thereby enabling them to remain independent and objective when assessing ECL provisions and PD and LGD calculations.
Having all your clients use us for their IFRS 9 ECL provisioning, will result in more accurate ECL provisioning and lower firm risk.
Enterprises
Enterprises are required to provision for ECL IFRS 9. We provide firms with highly accurate ECL, PD, EAD and LGD estimates. In addition, we provide full reports, in plain language, that include the necessary IFRS 9 and audit requirements in order to facilitate approval by CFO’s, Audit and Risk Committees (ARC) and the Auditors.
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Financial Institutions
Thinking Analytics provides financial institutions with credit scoring models to help streamline and speed-up the credit risk appraisal function. Our models have demonstrated improvements in terms of efficient, accurate and timely credit approval decisions.
Recent Developments
A structural transformation
There has been a wholesale transformation of credit markets in the past few years and this has been triggered largely by regulatory developments – notably Basel 4, International Financial Reporting Standard (IFRS) 9 and Current Expected Credit Losses (CECL). The effect of these initiatives has been to stimulate new ways of thinking about credit and how banks structure and organise it.
The result of transformation
Historically, staff at financial institutions have use experience and judgment to assess a customer’s creditworthiness. However, as the demand for consumer credit increases over time these traditional techniques have proven to be inefficient and time consuming. As a result, attempts have been made to automate the task of credit risk assessment and ECL provisioning.
COVID-19
The pandemic has introduced a completely unexpected variable into the equation, modifying the structural shift already gripping the credit landscape, and accelerating the credit deterioration.
The effects of COVID-19 are linked in large part to how governments react – how much lockdown they impose, what level of reopening and restoration of ‘normal’ services they allow, and the type of fiscal policies they inject into the system.
Post COVID-19
Regulators will have to cooperate with financial institutions to enable them to make a shift recovery. We are likely to see a great deal of credit ‘relocation’, as companies in industries that were relatively stable before the pandemic (such as transport, travel and hospitality) find themselves struggling, and more marginal sectors (energy sector, for example) in need of additional support. Credit in emerging markets will also face a turbulent time.