SharePoint GRC, ECM and Information Architecture

Risk Management Solution for Basel III Implementation

Posted on August 20, 2013 by Viji Anbumani

Basel III regulations are aimed to create a stable financial institutions. The standards are developed to strengthen the capital and liquid rules, enhanced minimum capital requirements, supervision and risk management of banking sector. These measures are expected to improve banking sector's ability to absorb shocks from financial stress and strengthen banks' transparency disclosures

With banking regulators approving the framework, banks must review technology impact to adopt these voluntary regulatory standards.

Compliance Platform Implementation

The IT solution must address the following requirements to comply with governance requirements of local and national regulatory authorities

  • Liquidity risk management solution to track high quality liquid assets, manage regulatory capital, risk coverage reporting and trigger action when percentage of capital to total exposure exceeds the threshold.
  • Reporting engine to collect and calculate Capital, Liquidity and Leverage Ratios. Transparency of capital reporting is to be guaranteed, with stricter definition of capital reporting and must occur from various divisions, business units and eventually rolled up on organization level.
  • Data quality: Data model must report from multiple business and technology silos to calculate the enhanced capital, liquidity ratios, and leverage ratios. Business process to report the metrics to local supervisors, risk team, and national regulators. The reports must be available in multiple formats to be used by regulators and also by business decision makers. This data must reflect true situation of institution's credit, and liquidity risk.
  • Data Auditing: Internal risk managers and external auditors to validate data and able to view reports in granular and repeatable way.
GRC solution on SharePoint 2013 for Basel III regulatory requirements.
Integrated Approach

Recently Sai Innovations implemented Basel III GRC portal for a financial institution in Singapore. SharePoint portal was powered by Performance point consolidates, calculates, test, and reports an organization’s capital and liquidity risks. BCS integrates with LOB source systems, and ETL platform has a strong data rules model build for validation during migration process. GRC engine would perform daily calculations to generate daily and weekly reports. The reports will be published automatically to portal to be viewed by different risk managers.

Regulatory supervisors will be notified automatically when a report is available or when an alert is triggered based on business or compliance rules. The report can be exported and shared with third party auditors as required. By generating reports against compliance data, bank management can understand how the business is performing against its commercial objectives.

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Comments

André Haughton on 1/5/2014 5:58:11 AM

Nice blog for risk management.

GuyaneseGyal on 1/3/2014 1:35:49 PM

Love this blog. It is useful to know the risk management.

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