IFRS 9 Technology Solutions 2016

<p><strong>IFRS 9 is a high impact symbolic, operational, IT and organizational transformation&nbsp;event for Finance and Risk:</strong> an arranged marriage that is turning an uncomfortable&nbsp;courtship and good intentions into a powerful successful partnership that is greater than the&nbsp;sum of its parts. It is one of a few interlinked, unavoidable initiatives in finance, regulation,&nbsp;compliance and risk management that are catalysts to invest in sustainable best practice.</p>

<p><strong>It has common foundations with a number of other key regulatory trends.</strong> Therefore&nbsp;the foundations for an easier implementation of IFRS 9 can be achieved if an organization&nbsp;has performed well, for example, in implementing:</p>

<ul>
<li>Close working practices and a common culture between risk management and finance&nbsp;with regard to risk-adjusted performance management;</li>
<li>Rigorous enterprise credit and counterparty risk management and is Internal Ratings&nbsp;Based (IRB);</li>
<li>CCAR, DFAST and EBA stress testing;</li>
<li>BCBS 239 for data management;</li>
</ul>

<p><strong>Organizational support for implementing and running IFRS 9 will require change,</strong>&nbsp;through greater involvement of different departments that hitherto have not been as directly&nbsp;active in finance activities. These particularly include risk and regulatory reporting.</p>

<p><strong>The marketplace, including large tier 1 financial institutions, is turning towards the&nbsp;software vendors for solutions.</strong> However, this new marriage of Risk and Finance is not&nbsp;reflected in most of the software vendors’ previous experience. There are very few one-stop&nbsp;shops that encompass the whole process from transaction origination to audited P&amp;L and&nbsp;Balance Sheet. Therefore, there are also a lot of integrated, multi-vendor solutions.</p>

<p><strong>There are few fully complete software packages that reflect the target state required&nbsp;by 2018,</strong> with deliverables still occurring during 2016 which make some Proofs of&nbsp;Concepts (PoCs) reliant on vendor credibility and trust or successes for the early deliverers.</p>

<p><strong>Large financial institutions’ complex structures demand large in-house, development,&nbsp;implementation and operations teams as well as extra support from all their&nbsp;external professional advisers.</strong> All other financial institutions can rely on the packaged&nbsp;software marketplace but they require close support from the large audit firms as well as&nbsp;extra consultancy, development and integration resources. Throughout 2016 and 2017&nbsp;there is going to be a shortfall in suitably qualified experienced support services teams&nbsp;in this market sector, which, as mentioned earlier, has some new methodological and&nbsp;organizational challenges.</p>

<p><strong>Data to support impairment modeling and calculations is a critical success factor.</strong> If&nbsp;not assembled comprehensively, aggregated and normalized rigorously within a formal&nbsp;data management and well-engineered IT architecture then firms’ results will be negatively&nbsp;affected. Many firms, particularly those that have not been through the internal rating based&nbsp;(IRB) experience will have to upgrade their IT architecture or rely on a vendor’s Software&nbsp;as a Service (SaaS) infrastructure.</p>

<p>This report uses Chartis’s FinTech Quadrant™ to explain the vendor landscape. The FinTech&nbsp;Quadrant™ uses a comprehensive methodology of in-depth independent research and a clear scoring&nbsp;system to explain which technology solutions meet an organization’s needs.</p>

<p>This report covers the following vendors offering IFRS 9 technology solutions for financial&nbsp;institutions, including AxiomSL, Fernbach, FIS, Misys, Moody’s Analytics, Oracle, Prometeia,&nbsp;Quantifi, SAP, SAS and Wolters Kluwer FS.</p>

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• Topics
• Vendor analysis
• Analytics
• Data Management
• HPC/Calculation/Processing
• Financial Risk
• Risk & Data Technologies
• Financial reporting
• Banking