Granularity of the Data Challenges for the IFRS9 - By Rajesh Sharma at IFRS9 Data Challenges – SAP TAO Limited

Granularity of the Data Challenges for the IFRS09 - By Rajesh Sharma at IFRS9 Data Challenges workshop. 

Disclaimers:
All the information on this topic is published for general information purpose only and further to be noted, this material is completely production of authors’ own research contents / material collected from various websites, conference and workshops in a close groups such as Meetup, online webinars, training video, elexica etc. I do not make any warranties about the completeness, reliability and accuracy of this information. Any action you take upon the information is strictly at your own risk and we will not be liable for any losses and damages in connection with the use of our information.

Data governance and access management. 

Sponsored by SAP TAO Limited 

Detail ppt and text available upon request , 

IFRS9 - Banking industry initiative- Risk, finance and compliance working toward IFRS9

By Rajesh Sharma at IFRS9 Challenges workshop at CFP – SAP TAO Limited.

Disclaimers:

All the information on this topic is published for general information purpose only and further to be noted, this material is completely production of authors’ own research contents / material collected from various websites, conference and workshops in a close groups such as Meetup, online webinars, training video, elexica etc. I do not make any warranties about the completeness, reliability and accuracy of this information. Any action you take upon the information is strictly at your own risk and we will not be liable for any losses and damages in connection with the use of our information.

Banking industry initiative- Risk, finance and compliance working toward IFRS09

 Risk view for the IFRS9

Upcoming BCBS initiative 

IFR9 - Implementation road map for Finance

 IFR9 -  Risk over sight overview

IFR09 - Implementation completion  road map 

Consolidated finance view - IFRS09 

Consolidated  risk and finance challenges - IFRS09 

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Consolidated  risk and finance compatibility - IFRS09 

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Detail ppt and text available upon request ,please send email  

SAP Bank anlyzer as a multidimensional capital management and performance measurement tools,

Omnichannel Architecture and SAP Bank Analyzer.

As we know the  Digital Banking revolution is transforming the way in which customers interact with banks. Smart-phones, Computers, Phone Banking, Branches or even Social Networks offer multiple communication channels and bring the opportunity for a deeper relationship between the bank and their customers.

On the other hand, obsolete processes and legacy systems are far from being ready to be aligned with the new paradigm. Many, if not most, of the banks are incapable of managing holistically all their interaction channels.

For instance, different channels have different response times, presenting contradictory experiences and generating a distorted image of the bank to the customer and vice-versa.

The response to this challenge is the convergence of physical and virtual channels, putting the customer at the centre; this approach is normally called Omnichannel Architecture.

Personally, I don’t think the name Omnichannel is a fortunate one, digital banking is not only a technical revolution but also a social one. The context of the interaction is as important as the channel through which is happening.

For instance, when we access to a banking service in Facebook, what’s the interaction channel, Internet, PC, Smartphone, Tablet or Facebook?

On the other hand, the context of banking interaction in Facebook is potentially very different to a traditional Online Banking interaction, and they can be both Internet based.

What’s most relevant in this case, the context in which the transaction is requested and fulfilled, the channel in which the interaction occurred, or both analytical dimensions must be analyzed?

Determining the analytical dimensions of the bank’s portfolio will define the analytical business segments, and this is the most critical activity in a Bank Analyzer implementation.

Managing a bank requires analyzing the business segments in which the bank is investing and finding an answer to some important questions.

For instance:

- Expected return weighted by capital consumed in the business segment.

- Liquidity generation and consumption by business segment.

- Value at Risk by business segment.

Digital banking requires defining the business segments according to a multidimensional matrix of customer types, ratings, syndication agreements, origination channels, transaction contexts, etc.

Traditionally; business segments performance has been measured by a combination of manual calculations, spreadsheets and silo based reporting systems, with very limited integration with the accounting and capital management systems.

SAP Bank Analyzer – Integrated Financial and Risk Architecture offers a solution to the above issue with multidimensional capital management and performance measurement tools, fully reconcilable with the Accounting Systems.

There’re some rules to be followed in the definition of the Business segments

-Dimensions should cover, without overlapping, any present or future opportunity for capital allocation.

-Key Figures must be capable of representing, without overlapping, all the necessary performing indicators (fees, costs, capital, short-term receivables, etc.)

Suboptimal definitions of the business segments and performing indicators will limit the future system capabilities. And once the system has been initialized is challenging to modify the structure of the Financial Database, especially for generating historical data according to the new structure, so you better do it right at the first shot.

IFRS 9: Impairment & Implementation differ to Insurance entities -Interactions between IFRS 9 and IFRS 17..

Anyone interested to join workshop about the Interactions between IFRS 9 and IFRS 17.. 

https://fsaa.com.au/content/997/ifrs-17-conference-2019

please ping me also about the comparison of the 'IFRS9 and IFRS17'; white paper. 

With accounts departments generally dealing with historical data and risk functions dealing with forward looking models, questions are being raised as to what overlap there is between current risk management and accounting information and the roles of risk and finance departments in the programmes.

the  IFRS 9 Impairment And IFRS17 CSM Implementation  are bringing together the leading independent experts and financial risk, finance and accounting experts to address the critical challenges, and opportunities, being faced in IFRS 9 and IFRS 19. As the IFRS 17 making changes to the valuation of liabilities, IFRS 9 mainly have had (or will be) impacting the valuation of assets. 

IFRS 9 affects measurement, impairment and hedge accounting of financial instruments.

and the IFRS 17 (principle based approach) evaluates all relevant insurance contracts and introduces a contractual service margin A new KPI form the Balance sheet figures. 

AS we predicted the accounting mismatches aroused from IFRS 9 valuated instruments on the asset side are to be expected to improved, since insurance contracts could have will be included on the financial instruments which are linked to corresponding investments (especially life insurance contracts category).

It made surprised to know that insurers can postpone the original IFRS 9 implementation date (01.01.2018) to the IFRS 17 effective (now revised to 2023, date to cover up the accounting mismatches (deferral approach) upfront.

What are the key facts with IFRS9…

IFRS accounting rules change forces banks to alter view of losses

The new standard, issued by the London-based International Accounting Standards Board as IFRS 9 Financial Instruments, moves from an incurred loss model to an expected loss model, marking a big change for banks, insurance companies and the users of financial statements.

It follows the IASB’s exposure draft on limited amendments to IFRS 9 on classification and measurement of financial instruments issued in December 2012.

n 14 February 2013 the FASB published a proposed ASU on classifying and measuring financial instruments. It follows the IASB’s exposure draft on limited amendments to IFRS 9 on classification and measurement of financial instruments issued in December 2012.

On 14 February 2013 the FASB published a proposed ASU on classifying and measuring financial instruments. It follows the IASB’s exposure draft on limited amendments to IFRS 9 on classification and measurement of financial instruments issued in December 2012.

For the first time, banks will have to recognise not only credit losses that have already occurred but also losses that are expected in the future. This is designed to help ensure that they are appropriately capitalised for the loans that they have written.

IFRS rules are required to be used by listed companies in more than 100 countries, although the US is a notable exception, and in Japan the use of them is voluntary.

Concerns about impairment came under the spotlight during the financial crisis because banks were unable to book accounting losses until they were incurred, even though they could see the losses coming.

At times the incurred loss rule meant banks overstated profits upfront and did not make prudent provisions against expected losses, particularly in areas such as the loans they secured against real estate.

At the G20 summits in 2009, world leaders declared that improvements needed to be made to financial reporting, and the IASB took up the baton to address the weakness in existing standards, alongside its US counterpart, the Financial Accounting Standards Board.

The new standard, which comes into effect on January 1 2018, means that companies must make a provision for potential credit losses over the next 12 months. Where credit risks are deemed to have increased significantly, banks have to record the lifetime expected credit loss.