Prior to the global pandemic, most banks and financial institutions were already on a path towards digital transformation. Enterprise-wide operations are now streamlining processes and leveraging automation at an accelerated pace to meet the needs of employees and partner organizations. Digital is everywhere, but success is by no means guaranteed. To improve success rates, many organizations have turned to design thinking as a key ingredient. But what is design thinking and how are organizations leveraging the approach to outpace the competition and win with customers, employees and partner organizations?
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Basel IV - The End of an Era?
“Basel IV” marks the final phase of Basel III implementation. Rather than further changes to capital requirements, these reforms are intended to “restore credibility in the calculation of risk-weighted assets (RWAs) and improve the comparability of banks’ capital ratios” by remedying issues the BCBS identified following the initial implementation of Basel III guidelines.
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Getting to Yes: Managing the Renegotiation of LIBOR-based Agreements
Currently, there are in excess of $5 Trillion in US business and consumer loans outstanding that rely on LIBOR benchmarks. Every single lending agreement underlying these exposures will need to be remediated prior to the LIBOR end date. For a single agreement, negotiations with borrowers and legal representatives can take months. Creating a framework that balances the inherent complexities of moving to a new benchmark rate, client interests and preferences, and banks’ resource constraints is a delicate task.
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LIBOR Testing: What to Consider as We Near the Transition Deadline
The industry-wide transition from London Interbank Offered Rates (LIBOR) to Alternative Reference Rates (ARRs) is rapidly approaching. Strong system integration testing practices, coupled with a comprehensive validation and verification strategy, are essential components for a successful transition. Failure to implement a robust testing framework risks inaccurate regulatory reporting, which often translates into loss of confidence of the overall program and may draw unwanted regulatory scrutiny.
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Data to Insight: Using Visualization to Give a Voice to Your Data
At a fundamental level, data needs to be both relevant and understandable in order to derive the maximum benefit. Data analytics provides the framework to make data relevant, while data visualization helps to make the data understandable. Teams that can successfully combine data with design to drive actionable insight and make effective business decisions, will give their organizations a competitive advantage.
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Capitalizing on the New Current Expected Credit Loss Deadline
Current Expected Credit Loss (CECL) rules represent a major change in loan-loss accounting from the legacy “incurred loss” model. Implementing these new standards will represent a whole-organization challenge, requiring extensive expertise. A recent extension to the implementation deadline provides an opportunity for smaller firms that have not yet transitioned to ensure they are doing so in a systematic and forward-looking way.
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