Five modelling challenges in modern forecasting and stress testing

Five modelling challenges in modern forecasting and stress testing

Since the implementation of International Financial Reporting Standard (IFRS) 9, capital & impairment forecasting and stress testing has seen a sharp rise in complexity across the banking industry. 4most consultants have been working on projects dealing with Internal Capital Adequacy Assessment Process (ICAAP)…

120 Seconds with our Head of Data Science

120 Seconds with our Head of Data Science

We are proud of the passionate team of experts we have at 4most and we would like to share their motivations and thoughts on their specialist areas with you. This is the first in our series of ‘120 Seconds’, a question and answer session with Fabrizio Russo, Head of Decision Science.

The PRA’s thoughts on IFRS 9 - our comment

The PRA’s thoughts on IFRS 9 - our comment

On the 15th April the PRA wrote to the CFO’s of the top seven banks to give their initial opinions on the implementation of the new impairment requirements under IFRS 9. As expected for such a substantial subject, the findings, based on their written auditor reporting work, are varied in nature. Through discussion with a range of lenders and client engagements, we see many of the issues raised by the PRA. However, there are also some omissions that we expected to see.

Being the bigger robot: capitalising automation for better decision making

Being the bigger robot: capitalising automation for better decision making

Machine Learning has been one of the hot topics in finance over the last few years, with benefits observed in most areas – many large institutions have prototyped and implemented techniques across decisioning, strategy optimisation, and fraud. The other key area that Machine Learning can bring significant benefits to, is automation.

CREDIT RISK, COMPETITION AND CONSUMER BANKS

CREDIT RISK, COMPETITION AND CONSUMER BANKS

A recent Bank of England working paper highlights the link between banking market competition and financial system stability. Consistent with earlier work, it highlights that as competition increases, the banking system overall responds typically by moving to higher risk lending.  However, in addition, it describes how individual banks tend to converge with the most-risky becoming more secure as competition increases.