Engagement Description :

The bank had been struggling to get validation of credit risk models for approval by the regulator. The bank reached out to HCLTech for performing an independent audit and deep dive validation of their key credit risk lending models

HCLTech Solution:

Assessment, review, and challenge of the outputs of the Irish Banks’ model validation program. Devised co sourcing test plan for testing periodic validations of the 5 IRB Credit Risk Models. Conducted Tests on the risk models including Mortgage PD andCorporate PD, , drafted the final audit report for R&C assessment. HCLTech played a role in the client’s 3rd line of defense supporting the Risk Audit function. The results of the Audit was used to gain local Regulatory Supervisor approval, ensuring the right level of testing and controls work was deployed to independently validate the client’s Risk modeling. The R&C validation unit and co-sponsored project steering review team setup by HCLTech became part of the governance framework for the overall Risk Audit, thereby ensuring scrutiny, high quality results and adherence to the local central bank and Basel regulations.

Benefits:

• All tests in the Audit plan were executed as pertaining to the overall Risk Audit schedule communicated in the governance status reports.
• Issues identified on collateral data feeding into the rating systems allowed client to note to regulator dealing with IRB model approval to plan for any further remediation work with HCLTech able to support.
• Recommendation given to automate the current Audit capture and workflow system a manually intensive process and offer better solutions to undertake the same functions without the need for so much manual intervention. Identified future benefit for audit team to reduce audit times as well as make improvements on documentation and align to the banks strategy around maintaining an efficient digital footprint.
• Business processes for SAS data capture and transfer flagged for future improvements. HCLTech able to offer AI, machine learning and Risk analytics products Actian Vector which can perform Risk aggregations and produce complex Risk calculations to enable risk processing and improve data quality

Compiled final results of IRB model review

Engagement Description:

The bank must be enabled to be compliant with the IFRS9 regulations within strict timelines and be able to forecast credit losses

HCLTech’s Solution:

Analysed data gaps (Risk data including PG, LGD, EAD) proposed data solution, performed data modelling, designed and built IFRS 9 data mart. Involved in the requirements gathering, analysis, design and development phase to provide impairment related data to comply with the regulations from IASB. The reporting framework applied disclosure requirements, prepared group financial reports including the banks subsidiaries. This was a global solution for the bank which covered Europe, Middle East, APAC & Africa.

Benefits:

Avoided huge penalties and business restrictions due to compliance with IFRS 9 and was able to produce a daily feed of data without compromising on processing time and data quality. The bank had seamless coordination amongst risk, business and finance units.

Engagement Description:

Define a consolidated solution platform to deliver requirements across key strategic risk transformation work streams (EC, Modelling, Stress Testing, Risk MI)

HCLTech’s Solution:

HCLTech’s Architects followed the TOGAF standards to develop a target architecture view by using a scorecard-based evaluation of vendor platforms. The participants in this activity were the key business and IT sponsors’ who ranked the vendor platforms and provided an objective measure for future vendor selection. HCLTech helped define and build the Enterprise architecture and Risk transformation Program architecture to address all corners of the business. The R&C models were implemented on data, business, technology, and application. Several interfaces were created amongst these pillars to eliminate risks and adhere to organization, and industry compliance methodologies.

Benefit:

A governing organization was setup to enable strategy, ensure review boards were the check posts, optimal portfolio management, and technology lifecycle roadmaps were in place. This resulted in achieving the target architecture using industry best practices and provided objective criteria for vendor solution evaluation, resulting in robust decision making; Generated TCO reduction of c. 30% Application simplification (12 platforms rationalised to 2)

Engagement Model:

HCLTech has implemented a bespoke Market Risk Platform. As a part of implementation HCLTech has owned end-to-end delivery of the Platform, Change Management, & Transition Management

Solution:

HCLTech has supported the bank in implementation, and transformation of its Market Risk Management Landscape through changing economic conditions and evolving regulatory norms covering all measures required for Basel II, II.5 and III. The platform has helped in achieving insights and transparency into the banks risk exposures, from clearing and settlement costs and uncertainties. The platform has optimized processes, worked collaboratively with all the business functions, and drove operational excellence.

Benefit:

Progressive reduction of 80% in calculation runtimes along with massive increase in transaction volumes in Credit and Market Risk Landscape. The strategic risk data lake continuously acquired data and performed high speed provisioning. The reference, operational and market data were used for further risk analytics & reporting at strategic, operational and tactical levels. Multiple layers were built on the platform for producing dimensional reports in Finance & CCAR.