Automated solutions for stress testing: an expanded CCAR and DFAST mandate
The expansion of the Federal Reserve’s annual Comprehensive Capital Analysis and Review (CCAR) and Dodd-Frank Act Stress Testing (DFAST) requirements to include Intermediate Holding Companies (IHCs) is expected to pose compliance challenges for newly affected institutions. Even Bank Holding Companies (BHCs) that have been through DFAST/CCAR reporting cycles are questioning how best to automate manual elements of their stress-test frameworks, in order to improve data quality and collection, lower costs and increase transparency.
For KPMG, the impact of DFAST and CCAR developments is part of a larger issue: how to best use technology and automation tools to support regulatory reporting and capital management compliance. Using advancements in automation and artificial intelligence technologies, we developed the KPMG Financial Institutions Reporting Engine, an automated reporting platform with related services, in order to help BHCs and IHCs increase efficiency, simplify reporting and improve compliance. The platform was developed through close work between KPMG and global financial institutions, as an industry-benchmarked reporting engine that provides traceability, controls and governance around reporting, and a significant reduction in time required to accommodate new regulatory requirements.
Submission Production: When coupled with subject matter professional support, the KPMG Financial Institutions Reporting Engine can help banks accelerate regulatory compliance. Mapping of data to the most updated regulatory templates, traceability from system of record to final reporting line items, production of required XML submission files, automated execution of derivation rules and regulator-mandated edit checks, and audit features for forthcoming requirements such as CFO attestation are all a part of the solution and services offering.
Reconciliation and Linkage: Using a comprehensive ontology model provides visibility into complex interrelations and linkages between data, regulatory rules, guidance, policies, model inventory, data lineage, meta-data repositories, data dictionaries and risk inventories.
Process/Data Flows and Risk Control Matrices: Big-data capability provides a document repository for both structured and unstructured data with an enhanced search capability. Policy documents, process maps, model inventory, and other critical (non-data specific) documents can be tagged to a respective line item – for immediate recall during the CCAR/DFAST exams.
Workflow Management: Customizable workflow capabilities helps organizations sequence priorities and support consistent governance, by identifying business-unit accountability, monitoring progress and providing leadership with enterprise-wise compliance visibility.
Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates.