The Journey
THE CHALLENGE
A retail savings bank urgently needed to replace its inferior IFRS 9 solution provided by a traditional vendor in this space. The Bank initially felt it would be impossible to move away from their existing provider in a cost effective manner with minimal disruption.
THE SOLUTION
The Bank had been depending on a traditional vendor to support their IFRS 9 requirements. Unfortunately it was taking far too long (often over 48 hours) to complete the calculation of their Expected Credit Loss (ECL).
The Bank desperately required a more modern-day solution, that could seamlessly run their ECL calculations in a shorter timeframe, with the added ability of running multiple simulations in the same environment and with minimal effort needed.
ElysianNxt provided a solution based on cutting edge technology enabling the Bank to step into the world of real-time risk management.
THE OUTCOME
ElysianNxt proved in a very short space of time that the Bank could quickly and easily replace their existing platform and run their ECL calculations within a much improved 2 hour window.
- The Bank implemented an IFRS 9 solution in 2017-2018 with one of the traditional vendors in this space.
- The system proved challenging and needed 48 hours to complete the calculation of Expected Credit Loss (ECL).
- The implementation of the incumbent traditional solution took around 6 months.
- In 2020, the license with the initial vendor came up for renewal at which point the Bank decided to look for another vendor.
The Bank’s concerns for considering a new solution:
- The bank had spent significantly on the initial implementation, was hesitant to take on another project and had little appetite to spend more money.
- A replacement project could take a long time to implement and users would have to be retrained.
- ElysianNXT proved via a Proof of Concept that it could easily replace the existing platform in just a few weeks and for a significantly lower cost to the Bank.
- In only 6 weeks the Bank was having like for like results and coverage.
- The ECL calculation now completes within 2 hours on the existing hardware of the Bank.
What did the bank get out of it:
- End of month process shortened by 2 days.
- Users can easily run simulations and stress tests.
- No new IFRS 9 license had to be bought as ElysianNxt’s software is based on a yearly subscription.
- Prevents all future expense on painful upgrade projects by a continuously updated solution
- The third-party database license could be scaled down as ElysianNxt does not need the enterprise version.
- In 2021, the Bank decided on a re-modelling exercise for a number of portfolios.
- The flexibility of the platform made this possible in a matter of weeks.
WHAT MAKES US DIFFERENT
- Built on the latest technology supported by a data streaming and micro-services architecture.
- Enables users to run calculations, simulations and what-if analysis in minutes on large data sets.
- Includes out-of-the-box model methods for construction of forward-looking Probability of Default (PD), Loss Given Default (LGD) and Exposure of Default (EAD) curves.
- Can be implemented in weeks rather than years.
- Empowers Risk and Finance Users to make changes to the configuration via the intuitive User Interface.
“Today’s Technology allows Financial Institutions to run what-if analysis on the fly and present results in no time. Given the current economic climate and in line with upcoming regulations, this is no longer a nice to have but a crucial strategic element.”
– Matthias Coessens, Managing Director Europe – ElysianNXT
