We work with risk functions to address the implications of various change drivers, with the aim of considering risk as an opportunity to drive business insight and improvements to enhance value.Our risk consulting teams are focused on helping clients formulate and execute plans to address a variety of changes resulting from regulation as well as strategic, technological and operational initiatives. Our diverse team of specialists covers all major risk types (especially credit, market, liquidity, operational) and features a strong quantititive risk capability.
Recovery and Resolution planning forms part of an overall process designed to enhance the resilience of the industry and put adequate measures in place to restore institutions without public support. With our broad experience in the preparation of recovery plans and our expertise in the key elements of resolution, we assist firms in designing and operationalising these plans, ensuring regulators’ requirements and expectations are met.
Eurozone banks have been grappling with the Internal Liquidity Adequacy Assessment Process (ILAAP) since the introduction of the SSM, and UK banks for even longer. This core prudential requirement typically covers liquidity and funding risk management framework, funding strategy, strategy regarding liquidity buffers and collateral management, cost/benefit allocation mechanisms, intraday liquidity risk management, liquidity stress testing and liquidity contingency plans.
The way banks account for market risk in determining capital requirements, including the impact on banks’ solvency due to changes in prices affecting the trading book and changes in interest rates in the banking book, is undergoing significant change. Avantage Reply has a strong understanding of the “FRTB” and “IRRBB” requirements, has hosted events on the topic with banks, industry bodies and regulators, and is well placed to help banks navigate the challenges posed.
Stress testing has long been a risk management tool used by banks to gauge their resilience to adverse or unexpected economic circumstances. As the extent, nature, complexity and timescales of stress testing becomes more demanding for banks, challenges have emerged including data quality, model suitability, control and governance; reporting and process efficiency. Avantage Reply has extensive experience working with financial institutions in all of these aspects of stress testing.
This long-standing regulatory requirement continues to pose challenges for banks as regulatory requirements and expectations continue to evolve, and as larger banks expand their focus on legal entity capital and risk management. Avantage Reply has substantial experience in the development of ICAAP as well as impacts on risk appetite frameworks.
Operational risk has matured as a discipline since it became an integral part of financial institutions’ risk management. New regulatory requirements are being developed and will continue to contribute to the already-heavy regulatory burden on banks. This is compounded by a number of organisational change projects to the extent that operational change often introduces additional operational risk.
The rising cost, complexity and regulatory burden of managing a model portfolio is increasingly prompting financial institutions to think more broadly about how they manage model risk: the risk of financial or reputational damage due to errors in model development, implementation or use. Avantage Reply’s reputable quantitative risk practice provides clients with solutions and advice related to the entire model risk lifecycle.
Internal audit functions are faced with an increasingly challenging external environment driven by on-going regulatory change, macroeconomic factors and a competitive environment. Avantage Reply can provide a wide range of internal audit and assurance initiatives within a number of areas.
Avantage Reply has substantial experience in developments regarding SSM SREP to meet ECB and EBA requirements. Since its introduction in 2015, the SSM SREP shows various discrepancies in supervisory practices within Euro zone banks. There are increasing supervisory expectations by the ECB including notably strategic processes, business model and governance.
The vast world of Credit Risk has seen some of the most challenging yet interesting changes in banking in recent years. While the basics of Credit remain relatively unchanged, industry players and regulators have been busy expanding the horizons to both optimize processes and effectively monitor risk. Avantage is keeping pace on multiple fronts, taking head on some of the hottest topics in Credit Risk today: from the digital transformation revolution of processes and data collection, to the stringent and ever evolving regulatory framework for Non-Performing Loans, to the promising influence of artificial intelligence in risk modeling, Avantage has you covered for best practices and solutions.
Avantage Reply assisted a world market leader in Credit Insurance in supporting its Risk Modelling team with the monthly and quarterly processes regarding the quantification of the credit risk linked to their insurance portfolio.