Beginning in 2012, the Federal Reserve Board (FRB) mandated that U.S. bank holding companies (BHCs) would have to file “CCAR” led by stress testing. The stress testing is designed to ensure financial institutions have a robust and forward looking capital planning process. These reporting requirements are applicable for banks with Risk Weighted Assets (RWA) of $50 Bn and above.

Business Situation:

As part of a CCAR stress test, banks are required to submit very granular data across risk and finance including Balance Sheet Projections, P&L and Capital reflecting different macro-economic scenarios.

Along with quantitative projections, banks are required to provide supporting information on the Methodologies across each scenario: Assumptions, Stress Testing Process, Expert Judgment, Data and Decision Traceability, Policy Reference in support of these CCAR submissions.

The Challenge:

Today banks require a very high level of manual coordination (estimated to be 6,000 Hours) between their risk, finance and business units to organize data and information required to justify and defend their CCAR submissions with regulators. This task becomes even more challenging due to data being resident in disparate data sources and the institutions inability to reconcile between risk and finance. Also, there are too many interventions, non-validated assumptions and data transformations that occur during the preparation of the CCAR report.

How we can help:

Parabole’s cognitive computing platform, through our web based self-service approach, provides real-time visualization of qualitative information alongside the physical data required to defend a capital plan to regulators. It delivers real time visualization of the following:

  • Traceability of risk metrics for various Regulatory reports such as FR Y-14 A/Q/M, FR Y-9C as well as Basel I, II, III to their physical data source.

  • Cross Report lineage (FR Y 14 Q~A~9C) and identify anomalies across reports before filing, in near real time.

CCAR - Data Traceability