Implementation of the IFRS 9 accounting standard has brought a paradigm shift in how banking and financial institutions manage credit risk. Unlike previous standards, IFRS 9 demands a more proactive approach through Expected Credit Loss (ECL) calculations. To address this complexity, the SAS Solution for IFRS 9 serves as a strategic add-on component for SAS Expected Credit Loss.
This solution is specifically designed to accelerate the time to benefit for banks in meeting the latest compliance standards with minimal implementation risk.
Why Does IFRS 9 Require an Integrated Solution?
The IFRS 9 regulation adds a significant layer of complexity to the impairment accounting process. Institutions are now required to build, test, and execute large numbers of complex analytical models. The SAS Solution for IFRS 9 is the answer for CFOs responsible for IASB standard compliance, as well as CROs tasked with providing accurate risk analysis and reporting.
Key Benefits of Using SAS for IFRS 9
Utilizing this platform offers various strategic advantages for bank operations:
- Project Acceleration: With pre-defined model templates, sample workflows, and ready-to-use reporting packages, banks can complete IFRS 9 projects much faster.
- ECL Modeling Efficiency: The point-and-click interface and pre-built templates significantly reduce the need for manual coding, thereby lowering long-term maintenance costs.
- Instant Results with In-Memory Processing: Leveraging the power of distributed in-memory processing, complex calculations can be performed faster than ever, allowing for on-the-fly data aggregation.
- Transparency and Governance: This solution ensures process transparency and auditability, which are crucial for maintaining robust model governance.
Technical Capabilities: From Analytics to Reporting
SAS provides a comprehensive ecosystem covering three main pillars: Modeling, Reporting, and Workflow.
1. Advanced Modeling and Analytics
To speed up development, various prepackaged templates are available for the most commonly used model types. Capabilities include:
- Comprehensive ECL Calculation: Supports 12-month and lifetime ECL calculations using various methods such as hazard models, Markov chains, PD curves, Loss Given Default (LGD), and Monte Carlo simulations.
- Scenario Attribution Models: Enables banks to assess the ECL impact of different economic scenarios.
- Input Data Models: Supports data integration for both ECL calculations and financial disclosures.
2. Aggregation and Self-Service Reporting
Out-of-the-box visualizations help finance teams quickly understand risk drivers.
- IFRS 9 Report Templates: Covers stage allocation/movement, credit quality, and reconciliation to IAS 39.
- Disclosure Automation: Speeds up posting to the general ledger and the creation of financial disclosure reports in accordance with IFRS and EBA FINREP guidelines.
- Project Management Dashboard: Centrally monitors monthly reporting status and related workflows.
3. Workflow Management
Integrated workflows enhance collaboration and transparency across departments.
- Risk & Finance Synchronization: Allows customization of accounting rules and data flows to improve auditability and process repeatability.
- Script Flexibility: The addition of SAS scripts allows for seamless integration between various separate parts of the IFRS 9 process.
Conclusion: Sustainable Compliance
Meeting quarter-by-quarter reporting deadlines is no longer a daunting challenge with the right system support. The SAS Solution for IFRS 9 not only helps banks meet technical regulations but also frees up expert resources to focus more on core business challenges such as capital optimization and risk mitigation.
With the ability to quickly understand the impact of changes in data and assumptions, your institution will have high flexibility in adapting to future regulatory changes.
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