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In’Regulatory

VALOORES Financial Regulatory Reporting

The Financial Regulatory Reporting Solution (FRR), one of VALOORES' in'Risk Compliance solution set, industrializes the end to end life cycle, through VALOORES' rule-based engine and in'Via Reporting engine, so companies can defend their numbers against regulators, meet their regulatory requirements, and extrapolate findings to profitability activities.

The solution secures BCBS 239 guardrails through governance and architecture, risk data aggregation, risk reporting and supervisory review to shed light over risk exposures and profitability opportunities across business lines and legal entities. As the regulatory and supervisory authority landscape keeps on expanding, VALOORES secures an agile and firm footprint through Master Data Management and Data Governance. FRR is tailored to accommodate complex global regulatory requirements and is designed to be fast and cost effective at delivering core reporting features, with flexibility to adapt to the ever changing regulatory requirements.

FRR equips multi-jurisdiction institutions with a Business Process Management (BPM) vehicle, an Information Security Governance platform, a multi-language capacity, a report designer to remodel and adapt to regulations, a universal dashboard engine, a Key Performance Indicators (KPI) and Key Risk Indicators (KRI) engine, and an Analytics engine to address Forward Looking Forecast, Scenario Management and Stress testing, alongside an unlimited drill-down capacity to granular data levels.

BPM is at the heart of the design, as it secures Ad Hoc / real-time scheduled executions across heterogeneous data sources and platforms, to meet the regulatory requirements in all trading markets around the world. It's tailored to transform the perception of financial regulations reporting from an administrative headache to a valuable asset to drive the business, while securing Risk, Compliance, and Profitability. VFS BPM entails triggering and scheduled events to manage and improve processes, then address exceptions.

The VALOORES in'Via Reporting engine goes beyond just delivering reporting with dynamic rule-based computations. It transforms data, including internal capital, risk, valuation, and other spectra into dynamic actionable information, to sustain end-to-end financial regulations reporting across jurisdictions, port findings to dashboards, and automatically compile information outputs the Business and Regulators dictate.

FRR encompasses end-to-end information processing while perpetually gauging accuracy and execution timelines to institute confidence and weigh in against a "work by exception" paradigm. Its interface is configurable to level set thresholds and accuracy tolerance, with a supporting audit trail framework to dynamically design lay outs and layers, then pull out KPIs, KRIs, and security clearances.

FRR is a holistic, multi-entity, multi-channel solution made accessible to the whole organization, based off well defined profiles and user rights. Universal Dashboards are exposed to authorized personnel to address exceptions and monitor activities. A Management Reporting Framework is streamlined with the financial regulations reporting pool, to complement the potential with decision-making/subject-matter vantage points, whether with local or consolidated information levels at any point in time.

… with Analytics

Analytics, Stress Testing, Forecasting, Trending, Variance, Ratios, Confidence Intervals and other techniques, accentuate the Financial Regulations Reporting Solution to institute what-if simulations and refine strategies, with a validation cycle backbone, going forward.


Why VALOORES?

As the financial system reforms, banks face varying dimensions of risks and multiple tiers of compliance needs across the different regulatory jurisdictions- financial risk, financial crime, operational risk, and governance & compliance. Therefore, this emerging compliance era continues to bring a new wave of challenging regulatory requirements touching on AML & CFT, IFRS 9, FATCA & GATCA, Basel I, II, III, CRS, and the like. This has left financial institutions scrambling to produce core regulatory reports where time constraints, rising logistical & operating costs, and the complexity of regulations are working against them giving way to new increased regulatory risks. Among the other challenges in producing these required regulatory reports are the large numbers of manual reconciliations, data integrity issues, systems limitations, analytical challenges, and governance weaknesses that institutions and firms face. Never before have banks ever needed more an end-to-end solution to tackle these mounting challenges in order to produce comprehensive, accurate, and timely reports than today.


  • Accounting framework upgrades have become more complex, but are yet, still being handled by manual processes often with error
  • Key staff attrition leaving new staff performing processes that are not well understood
  • Huge inefficiencies as teams are manually transposing data between manual consolidation layers and submission formats
  • Defaulting data in regulatory reports because the underlying data is not available (i.e. the general ledger system often doesn’t contain the required trade and customer static)
  • Inconsistencies across the bank as different teams operating from different systems submit conflicting information for the same positions (i.e. a single exposure is unlikely to match when viewed in a risk system versus a finance system)
  • A large number of issues and control weaknesses are being identified both internally and externally through audits
  • Greater regulatory focus either through fines, special audits, or suspension of approvals for new business requests
  • An inability to upgrade current processes for regulatory changes or even internal architecture changes leading to further layers being added to manual processes, resulting in massively increasing complexity
  • Costly & complex LCR requirements / Basel III
  • Multiple local liquidity requirements
  • Shifting liquidity mgmt. level across the group & entities
  • LCR requirements’ impact on each segment & product
  • LCR requirements impact on cost of doing business
  • Reviewing capital management priorities across:
    • Business lines
    • Geographic boundaries
    • Legal entities
    • Political boundaries
  • Change capital allocation across business units
    • More accurately reflect risks taken throughout enterprise
  • LCR’s significant effect on costs
    • ROE will go down
    • Costs & leverage will have to be reduced
    • Margins will have to go up
  • Selling assets to increase capital
  • Exiting no longer profitable business (no instant visibility on profitable business)
  • Exiting geographies (avoid trapped capital & liquidity)
  • Merge Legal Entities to consolidate in core locations
  • Exploring new products, markets & acquisitions
  • Pressures of new regulations on cost & ROE
  • Cutthroat Shareholder Expectations on Cost, Revenues, & Net Income
  • Prolonged low-growth, low-rate economic environment
  • Loss of talent during industry upheaval & fatigue
  • Market volatility & Sovereign debt crisis
  • Decreasing Systemic Risk
  • Strengthening risk culture (critical management focus)
  • Strengthening risk roles and responsibilities
  • Enhancing communication channels
    • Closed-loop Decision Making (division-based Performance Indicators & Objectives)
  • Reinforcing accountability
    • Cannot transform information to actionable action
  • Risk Appetite at the Enterprise Level
    • Cascade risk appetite through operational levels
    • Embed risk appetite into Decision Making
  • Lack of holistic visibility on operating cost: Desktop / Excel Syndrome
  • Out Of Bounds Processing - No real time alerting
  • Cannot sustain Emerging Business Segments & Surfacing Channels
  • ECL and Loan Loss Provisioning (IFRS 9)
  • Uncoordinated supervision
  • New strategic, operational, & potentially systemic risks (BASEL)
  • Insufficiently analyzed regulation changes
  • Internal transparency of information
    • Disparate Systems & Processes
  • Challenges extracting and aggregating appropriate data
    • Multiple siloed systems
    • Absence of questionable information
    • No Tracking / Monitoring
    • Business Process logic captive to Organization Silos
  • Fragmented management information on degree of risk
  • No visible Enterprise Strategy to address Security Risks / threats (Uncontained Risk)
    • Absence of Risk Assessment & Mitigation
  • Regulatory regime driving investment in Data and IT
    • Support Risk Management
    • Disparate Information Silos - Consumes IT Budget - Improper IT Reporting & BI streamlines (BASEL requirement)
  • Scenario planning to help consider & assess
    • Full range of market factors influencing stability
    • Macroeconomic events influencing revenue streams
  • Top Challenges to improved Stress Testing
    • Difficulty in extracting and aggregating data
    • Difficulty in designing plausible but realistic scenarios
    • Shortage of resources & Inadequate systems
    • Time and dollar costs of regulatory compliance
    • Inadequate methodologies
    • Lack of board interest and buy-in
  • Reinforce Communication (top down / bottom up)
  • Make data available across the enterprise
  • Multi-Directional Information Flow
  • Category / LOB-Based Targets
  • Inherit Past Category Targets / Reconcile lessons learned
  • Unique interface / platform for Business Units across all stakeholders & categories
  • Business Process Optimization & Threat Control
  • Cost effective infrastructure
  • Leverage best in class processes
  • Enterprise Insight on Risk & Compliance
  • Establish Risk Assessment (calibrate Compliance tolerance & gap levels)
  • Set / monitor / track risk appetite at group level
  • Unify Decisional Process
  • Review Process Frequency

Solution Overview

VALOORES’ Financial Regulatory Reporting delivers data sourcing & mapping across multiple systems, report structuring & generation tools, validation and auditability functionality, and automated drill drilldown and data lineage driven by an intelligent rules-based engine with easy workflow automation and supports submission in various formats.


KEY BENEFITS

  • Flexibility to deal with complexity
  • Change management
  • Leveraging data and processes
  • Drill down and 100% auditability
  • Data lineage and transparency
  • Dashboards
  • Electronic submission
  • Pre-submission review
  • High volume, high performance and reliability
  • Security and control
  • Global Coverage for all current regulations
  • Customizable data storage
  • Flexible architecture
  • Improved transparency
  • Preview of results
  • Automates complex workflow process
  • Delivers global coverage of reporting templates
  • Provides comprehensive views of financial information on entity and consolidated levels
  • Preview of results
  • Automates complex workflow process
  • Delivers global coverage of reporting templates
  • Provides comprehensive views of financial information on entity and consolidated levels
  • Enables business users to analyze each report on-screen line by line, providing comprehensive transparency
  • Aggregates data to view detail by any grouping criteria, such as Branch, GL accounts, etc. Allowing to view data on transactional trade or positional level at any point of the analysis
  • Delivers transactional level disaggregation, allowing users to drill-down into the data at any level of granularity
  • Multi-level sign off – hierarchies can be defined with automated alerts to the next level after signing off.

Reduced IT workload

  • Real Time Data Consolidation
  • Real Time aggregations & drill down

Institute product management, resource allocation, cost control, budgeting & planning to raise profitability levels

  • Constant monitoring of budgets and Goals
  • Faster response time to problems or gaps
  • Actionable customer & product profitability insight

Reduce Private Information Ownership

  • Enterprise Transparency on staffing, product performance, & business unit performance
  • Increase staff Productivity

Operational efficiency

  • Reduce maintenance fees
  • Target direct efforts (marketing…)

Mitigate Risk

  • Immediate action to set up strategies
  • Mitigating risks & potential risks

Gauge performance

  • Center of Excellence (COE) for BI
  • Measure how well products are priced and performing
  • Measure which customers are creating value & which ones are subduing
    • Holistic overview of customer relationships
    • Customer Centric insights
  • Measure how Bank / Financial Institution are performing at macro & micro levels
  • Gather data from customer channels/ touch points (ATM, Web...)

Profitability per Business Unit

  • Branch, Region, Area & Leadership levels…
    • Real time insight into branch performance

Profitability per LOB

  • Real time insight into enterprise performance per LOB

Value-based Net Interest Income / Margins

  • Capture spread b/w interest earned on assets & interest costs on liabilities
  • Measure interest income (ex: interest earned on loans) against interest expense (interest expensed on deposits)
    • Shed light on Dollar amount of Exposure
  • De-compose spread earned by each division based off FTP rate

Diversify

  • Secure & Drive Multiple Lines of Business
  • Visibility over compartmental profitability

Optimize

  • Return on Assets (ROA): Optimize use of assets to generate profit
  • Return on Equity (ROE): Optimize Net Income out of Equity Capital
  • … with Analytics
  • On a daily basis, banking systems generate and store massive amounts of data (e.g. customer information, transaction details, credit card details). Accordingly, thousands of decisions are taken. With such a volume, the manual analysis of data is inefficient if not impossible, especially if the velocity, the variety, and the veracity of data are taken into account.
  • The analytics engine can unveil missed opportunities implicit relationships, trend patterns, exceptions, and anomalies that are hidden to human analysts and experts.
  • The analytics engine is tailored to the bank's experience: In fact, its algorithms are trained on the historical and operational databases of the bank, and not on generic data. Thus, it allows the bank to learn about its clients and their behavior from its own experience with them, instead of relying on generic rules.

KEY FEATURES

  • Provides a universal dashboard and analytics engine to address Forward Looking Forecasts, Scenario Management and Stress testing.
  • Secures Ad Hoc / Real time scheduled executions across scattered and heterogeneous data sources and platforms.
  • Configurable interface to level set thresholds and accuracy tolerance, with a supporting audit trail framework, to dynamically design lay outs and layers, then pull out KPIs, KRIs, and security clearances.
  • Transforms data, including internal capital, risk, valuation, and other spectra into dynamic actionable information.