Banking Risk and Finance Management on Quality Data

Building a unique solution to cover the risk and finance reporting with PwC

European banks face increasing regulatory demands for reporting their financial and risk situation. Additionally banks must monitor internal performance and prepare additional reports for their own purposes. This places banks under scrutiny from regulators, who assess the quality and consistency of reports, and shareholders, who evaluate the efficiency of supporting functions, including Finance and Risk departments. PwC understands these challenges and offers comprehensive solutions to satisfy regulators and shareholders simultaneously.

Reports in scope

Our comprehensive solution addresses risk and finance reports starting with those from the EU, followed by reports at the national level, and finally includes internal reporting to complete the delivery.

Finance

  • FINREP - Consolidated Financial Reporting framework for supervisory purposes
  • IFRS - International Financial Reporting Standards
  • BSI - Balance sheet items
  • MIR - Monetary Financial Institution Interest Rate Statistics
  • EMIR - Reporting of all derivatives to Trade Repositories 
  • SHS - Statistics on holdings of securities
  • Internal financial performance reporting
  • Internal financial performance of the bank in product, client and sales force dimensions

 

Risk

  • COREP - Common reporting framework to report solvency ratio to supervisory authorities under the Capital Requirements Directive
  • Anacredit - Information on individual bank loans
  • SRB - Single resolution board reporting
  • IRB - Reporting the validation results of internal models 
  • AQR - Asset quality review 
  • EBA benchmarking - Benchmarking of credit risk, market risk and IFRS9 models 
  • EBA stress testing - Assess the resilience of financial institutions to adverse market developments
  • BCBS239 - Principles for effective risk data aggregation and risk reporting
  • Internal risk reporting
  • Internal reporting of risks to the bank management

 

Bank problem

Many bank teams are involved and significant effort spent to:

  • Run database infrastructure
  • Prepare source data for each report
  • Clean it
  • Make manual corrections
  • Report it

Despite it, quality issues and mutual inconsistencies arise in the reports.

Our capabilites

PwC has at your disposal a team experienced in:

  • EU regulatory reporting
  • Local regulatory reporting
  • Internal risk reporting
  • Business data understanding
  • Risk management and modelling
  • Data architecture and delivery

Our approach

Building a unique solution to cover the risk and finance reporting

  • EU compliant cloud platform infrastructure - MS Azure or Amazon AWS
  • Unified data set for financial and risk internal and regulatory reporting - PwC data model extension of BIRD
  • Automated data quality controls and their reporting
  • Process and tools to make and document manual corrections
  • Common cloud reporting platform

This solution saves the effort spent on regulatory and internal reporting and improve the reporting quality and consistency.

Data model

PwC data model extension of BIRD
Logical data model with the needed attributes of the main entities:

  • Rating,
  • Party,
  • Instrument,
  • Agreement,
  • Credit Facility,
  • Collateral,
  • Security and Derivative,
  • Securitisation,
  • Non-financial asset and liability.

Solution description

Banks usually have enterprise data warehouse storing the granular data in a common banking model. This is the right source for Risk/Fin common reporting layer.

If it is not the case, PwC can help to create the data warehouse for the data needed for Risk/Fin reporting.

Exceptionally, some data sources can be loaded directly into Risk/Fin common reporting layer. 

The core of the solution is Risk/Fin common reporting layer. It is based on BIRD data model enriched by PwC to cover the data needed for all the reporting. The reporting layer is equipped with Corrections application enabling to propose and to approve corrections in the data and to track them for an audit purpose. The corrections on the common data are realized just once and therefore the same way for all the reports.

Individual Risk and Fin data marts for different reporting purposes are then derived from the common quality data.

The solution can be hosted on MS Azure or Amazon AWS cloud or implemented specifically in a local bank infrastructure.

Solution architecture

Contacts

Petr Novák

Petr Novák

Risk Data, PwC Czech Republic

Tel: +420 602 383 972

Jan Muchna

Jan Muchna

Financial Risk Modelling, PwC Czech Republic

Tel: +420 777 563 619

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