Enabling efficient, transparent and precise stress-testing and regulatory compliance

Performing regulatory stress-testing with high efficiency amid changing regulatory expectations is a challenge for financial institutions globally.

Currently, most institutions have resource-intensive processes for scenario expansion. These typically require considerable manual work, are carried out regularly, and involve large volumes of market data and documentation.

Scenario expansion methodologies, an important component of stress testing, have remained quite consistent.

While risk identification, limit strategies and revaluation processes may differ, there are many similarities across data processes, scenarios and models used in scenario expansion by financial institutions, which can be leveraged to create a common industry framework.

Our SEM platform, which won the Risk Markets Technology 2021 award for Best Modelling Innovation, provides a centralised framework to expand, analyse and track all regulatory and internal scenarios, while being generic, reusable and transparent.

The platform uses identified similarities to streamline the scenario expansion process, allowing financial institutions to share the operational infrastructure used to conduct modelling activities related to stress testing.