• about reply
Avantage Reply Logo
Menu
  • About Us
    About Us
    • About Us
    • History
    • Our Approach
    • Values
    • Alumni
    • Strategic Partners
    • Media Contacts
    • Contact Us
  • Our Capabilities
    Our Capabilities
    • Our Capabilities
    • Risk
    • Insurance
    • Finance
    • Conduct & Compliance
    • Technology
  • Newsroom
    Newsroom
    • Newsroom
    • News
    • Events
    • Press Articles
    • Blog
    • Academy
  • Publications
    Publications
    • Publications
    • Briefing Notes
    • Case Studies
    • CRO Insights Journals
    • Infographics
    • White Papers & Practical Guides
  • Career
    Career
    • Career
    • BELGIUM
    • FRANCE
    • ITALY
    • LUXEMBOURG
    • NETHERLANDS
    • UK
  • about Reply
Avantage Reply Logo

Search

Focus On

Case Study

ILAAP Design and implementation

FOCUS ON: Case studies, Risk,
THE CLIENT

The client is a Belgium bank and is the result of a 50/50 partnership between the local delivery company and a large European bank managed completely independently within the framework of equivalence between the two shareholders. The local delivery company is the exclusive distributor of the products marketed by the bank while benefiting from the banking expertise of a large group for the development and launch of its products.

THE CHALLENGE

Avantage Reply has been selected by the client to provide subject matter expertise regarding the ILAAP process and its key components. In fact, it was a relatively new project for the Bank, which began the exercise just two years before. In the third year, the ALM department took the lead in drafting the ILAAP report and wanted to reinforce the overall framework to meet the expectation of the regulator, and to deliver it in a proper format to comply with the submission process.

APPROACH AND SOLUTION

After analysing the gaps between previous reports and supervisory expectations, the report needed improvements in several areas, especially the governance, the risk identification and materiality assessment and internal stress testing etc., as all these areas were almost empty in the previous ILAAP reports. With insufficient capabilities, there were numerous challenges to improve the report and initiate internal stress testing in a short period of time.

The approach retained by Avantage Reply and validated by the client’s management was divided into the following buildings blocks:

  • Gap analysis between 2017 ILAAP Report and regulator’s expectation;
  • Proposition of a new and more completed structure of the report and validation by client;
  • Workshops with the client on the topics: Governance, risk identification and internal stress testing;
  • Specific work including funding and liquidity risk assessment as well as designing and implementing a simple liquidity stress tests;
  • Propositions on a new target governance framework (mission statement, role, responsibilities, committees…); and
  • Preparation of an ILAAP report for validation of clients and submission to the local regulator.
RESULTS AND BENEFITS

At the end of this assignment, the ILAAP framework was restructured into being more completed and robust than previous ones including:

  • A strengthened ILAAP governance framework better integrated into ALM governance;
  • The Risk identification assessment within ALM team taken in account for the first time;
  • Several stress tests scenarios conceived and implemented for the first time; and
  • A reinforced ICAAP report complying with local supervisor expectations.

RELATED CONTENTS

Case Study

Enhancement of Internal Rating Based Framework

The client, a major universal bank featuring a significant wealth management activity, was in the process of enhancing its IRB framework (Internal Ratings Based) following Basel IV requirements and feedback from the European Central Bank (ECB). This program has been launched to repair internal models used to calculate own funds requirements for credit risk under the Internal Ratings Based (IRB) approach.

Case Study

Remediation of the outsourcing control framework

In 2021, an internal systemic Bank launched a holistic risk assessment of its Depositary Bank (DB) business. As part of this review, Avantage Reply performed a review of DB exposure to risks related to outsourcing arrangements including the effectiveness of controls to mitigate associated risks.

Case Study

Testing and management of migration to a new accounting system

Avantage Reply assisted a Finance department of a well-known private bank in their migration to a new accounting system and in the early post-migration phase. The project covered a wide range of activities such as...

 ​
 
 ​
 
Reply ©​​ 2023 - Company Information -
 Privacy Cookie Settings​
  • Abou​t Reply​​
  • Investors​​​
  • Newsroom
  • Follow Reply on
  • ​
​
  • ​About Avantage ​​Reply
  • Privacy & Cookies Policy
  • Information (Client)​
  • Information (Supplier)
  • Information (Candidate)