ALMIS® gives financial institutions the ability to manage, monitor and report their financial risk profiles, providing their Executives and Boards with accurate information on current and forward looking positions to help them proactively monitor and plan. The same system provides a single version of the facts and for regulatory reporting.
BASEL III, CRD IV, COREP, FINREP, BoE reports – the list is seemingly endless and, regardless of size or resource, all UK Building Societies have to comply with the specific demands of submission dates, report formats, data validations and auditability.
ALMIS® has helped more than 40 firms deal effectively with the burden and complexity of regulatory reporting.
Our recent presentation to PRA supervisors, requested on behalf of firms, a single point of accurate validation rules to reduce instances of re-submissions. We also highlighted the interpretation differences and the need for more clarification.
Automation of reports and use of the same data sources for management information is a key objective for both regulators and firms. Societies that demonstrate synergy and joined up thinking in their approach are in the best position to take maximum advantage of the favourable interest margins and prove their competence to regulators.
With the rapid approach of the first FINREP submissions (with some clients asked to submit ahead of time), together with the new taxonomy 2.1 (including asset encumbrance reporting), finance departments must effectively combine their finance teams with technology such as ALMIS.
The ALMIS® ALM system has operated successfully since 1992 as server-based software installed at a client’s premises. This works perfectly well for many firms, however, the advantages of a hosted system for some clients has presented the opportunity for ALMIS® International to launch a new ‘Hosted ALMIS® System’.
The Benefits
Our hosted solution enables clients to concentrate their resources on the key business needs addressed by ALMIS® ALM and Regulatory Reporting. The hosted solution eliminates all client interaction with IT infrastructure, software installation, performance issues and server maintenance. Hosting also provides data security and integrity and gives ALMIS® International the responsibility to ensure the current version of the ALMIS® system is used.
The hosted software solution is designed to work with small and large databases, whether one person or a hundred from the same organisation is using them. They accommodate the growth of your business seamlessly with optimal performance and minimum downtime.
The ALMIS® system operates seamlessly in this hosted environment, allowing the users to concentrate on the data – monitoring, analyzing and reporting across all areas of ALM and Regulatory Reporting.
How Does It Work?
The Hosted Operating Environment is the Microsoft Azure cloud-based service which uses a network of Microsoft-managed datacentres. This platform allows for resource usage to be based on needs and to be allocated and then charged for the processors and storage resources used. ALMIS® International installs, maintains and updates the system whilst the users simply access data from a PC-based web browser. Full functionality is available at all times depending on the ALMIS® modules the client has chosen to license.
For more information email.
Basel III set the global minimum standard for liquidity. The EBA (European Banking Authority), with the new COREP regime, introduced specific interpretation based on globally defined, detailed reporting requirements. These will be introduced as a Pillar 1 requirement in 2015, eventually replacing BIPRU 12.
Liquidity coverage requirements specify that firms should maintain liquidity buffers which are adequate to face any possible imbalance between liquidity inflows and outflows under gravely stressed conditions over a period of thirty days.
Part of the new guidance stipulates the need for a greater degree of granularity of reporting of retail outcomes under stress conditions to ensure LCR are met. Firms now need a powerful Liquidity system that can accurately categorise risk factors and calculate complex combinations to simulate various stress scenarios. They need to determine the optimal liquidity coverage (LC) for stress conditions ranging from grave to ‘business as usual’.
The ALMIS® Liquidity module has been enhanced ahead of the regulatory deadline to include powerful ‘Sticky Table’ logic to enable firms to quickly and reliably calculate retail outflows in order to comply with EBA guidelines for LCR.
The Sticky Rules Table will analyse and calculate (according to the guideline Categories 1, 2 and 3), combinations of High Risk Factors (HRF) and Very High Risk Factors (VHRF) including:
Customer view (including country of residence, value of deposit, currency, strength of relationship)
Product view (including distribution or product characteristics)
Maturity view for notice and fixed accounts
LCR and Regulatory COREP Reporting
Our system provides:
Auto-population of Liquidity Coverage Templates for COREP to save time and resources and help reduce data errors
New, enhanced report for Liquidity Coverage
More detailed analysis of Deposit by Customer
Whilst comprehensive LCR is essential for regulatory reporting, it is also a vital tool in the management information strategy of any banking institution. The ability to conduct analysis under different stress scenarios will provide management teams with more accurate management information to create the appropriate level and type of liquidity for both compliance and profitability.
For more information on LCR and the ALMIS® Liquidity module contact [email protected]
ALMIS® International were the Headline Sponsor for the BBA’s Annual Liquidity Conference held in London at the end of April.
Joe Di Rollo of ALMIS® International presented on the key topic of “Implications of BASEL III and COREP on a Bank’s organisational structure and IT strategy”
To view selected slides from Joe Di Rollo’s presentation at the BBA Annual Liquidity Conference 2014 go to click or for a copy of his full presentation email us at [email protected]
For more information on the BBA
ALMIS® International were the Headline Sponsor for the BBA’s Annual Liquidity Conference held in London at the end of April.
Joe Di Rollo of ALMIS® International presented on the key topic of “Implications of BASEL III and COREP on a Bank’s organisational structure and IT strategy”
To view selected slides from Joe Di Rollo’s presentation at the BBA Annual Liquidity Conference 2014 click or for a copy of his full presentation email
For more information on the BBA
The EBA has published an excellent online tool, cross-referencing all the technical standards to the Level 1 texts and any official Q&A.
To access the “Single Rulebook” click
Fact: LE reporting for the new COREP regime is detailed, demanding and complex
Fact: LE reporting now consists of 6 different reports
Fact: Firms should report two different measures of LE
Each LE being more than 10% of eligible capital
The 10 largest exposures by type, value and maturity
Fact: LE reporting needs to separately show connected groups of counterparties, NACE codes and legal entity identifiers (LEI’s)
This all adds up to a significant reporting burden for any finance department!
Fact: Using ALMIS® Capital Adequacy and COREP Reporting can significantly reduce this burden
Firms have previously benefited from using the ALMIS® system (Capital Adequacy Module) to monitor, control and report LE. Our enhanced Capital Adequacy and Reporting capabilities give them the power, flexibility and control to automate this process – now even more important to address the more detailed and complex reporting.
Firms need to use the same data to calculate LE as for CR (Credit Risk). The ALMIS® system seamlessly integrates and automates CA, CR and LE COREP returns using the Capital Adequacy module. This helps firms by:
Saving time and resources
Reducing input errors
Creating a single consistent version of the data
Providing a more comprehensive audit trail
Giving confidence to the regulators by using a controlled and integrated solution
For more information on how ALMIS® can help reduce your LE reporting burden, contact [email protected]
ALMIS® International are ready for COREP reporting but banking firms can breathe a sigh of relief as the new Regulation deadlines are delayed.
The EBA has today announced that the submission dates for the first set of COREP reports will be postponed from April/May 2014 to end June 2014, there is no change to the reference dates.
The postponement affects the following reports:
The first quarterly reports (own funds, large exposures, leverage ratio, and net stable funding ratio) with reference dates as of 31 March 2014 are now due end June 2014, as opposed to end May 2014.
The first monthly liquidity reports with reference dates of 31 March 2014 and 30 April 2014 are now due end of June 2014 as opposed to April 2014.
The first reporting reference date for asset encumbrance will be 31 December 2014 and the first remittance date will be 11 February 2015.
For more information on this update, see the EBA website
Georgina Macleod, Client Support Manager, commented ‘ALMIS® is ready for the first submission but there were so many technical difficulties and challenges facing firms that the delay will be welcomed by our clients. This gives us all a good opportunity to now implement the regulations properly’
“Complex topics described very well” M. Lynch, BLME
An Overview
The ALM Academy, developed and presented by ALMIS® International, successfully launched its first seminar on Thursday 27th March 2014. This series of high-level seminars has been specifically developed for directors, senior banking executives and members of a bank or building society ALCO to address key areas of ALM with a focus on the principals and strategic implications of the latest CRD IV regulations.
Our enthusiastic and knowledgeable delegates fully engaged in the interactive programme of workshops, discussions and the sharing of ideas under Chatham House rules. Delegates agreed that limiting the number of participants to 16 enabled more productive discussion and in-depth analysis of the issues.
The Delegate Experience
Overall feedback was very positive with 90% of the delegates agreeing that the content was informative, well presented and highly relevant. In particular, the use of case studies proved to be a very effective mechanism for understanding and applying ALM principals. We have taken on board suggestions for additional case study examples for future seminars. Here are just a few of the comments from the very satisfied inaugural ALM Academy class!
“A very useful day of both presentations and discussions around the key issues” N. Walker, Marsden Building Society
“A good grounding in Capital and Liquidity” R. Hetherington, Buckinghamshire Building Society
“Good overview of everything and deeper on the parts I wanted. Great to have case studies, good balance of difficulty and time.” S. Cotterill, Holmesdale Building Society
“Excellent day” A. Evans, Teachers Building Society
Topics Covered
The morning session included an insightful presentation on the overview of ALM under CRD IV as well as an in-depth review of IRRBB coupled with an interactive case study. This highlighted the significant benefits of using an integrated system such as ALMIS® for both ALM and Regulatory Reporting. We also covered analysis on Capital Adequacy under CRD IV with a particular focus on Risk weighted assets and CVA capital requirements.
The afternoon session concentrated on the topical subject of Liquidity management under CRD IV followed by a case study that examined a sample balance sheet for which all participants were asked to calculate ILG, LCR and NSFR.
The day concluded with an insight into Margin Management and FTP followed by discussion of Management framework and best practice.
Expert speakers on the day were Colin Johnson, Gianfranco De Martino, Andrew Capps and Joe Di Rollo. Full speaker profiles and seminar details can be found on our website.
Future Seminars
The initial seminar generated significant demand from the banking community throughout the UK. In response we are repeating the March seminar at the following locations:
London – Thursday June 12th 2014, The Grange Hotel St. Pauls, London.
Edinburgh – June 2014 – date and location TBC.
Places are limited so register your interest now by contacting Cecilia Mueller, Business Development Executive or call 0131 452 8898.
Back in 1992 when ALMIS® International was founded, spreadsheets were very much the norm for calculating balance sheet risk. The need to do calculations at all was a ‘nice to have’ but certainly not an essential part of managing a Building Society. The regulatory financial landscape has changed considerably since then, both in terms of the technology toolbox now available but also in terms of the need for comprehensive, reliable, auditable and reportable analysis.
Building Societies now need to analyse their financial risk profiles in numerous ways, providing their Executives and Boards with accurate information on current and forward looking positions to help them proactively monitor and plan capital and liquidity requirements, profitability and interest rate risk. Not only is this information crucial for managing a sustainable business model it is now part of a complex regulatory regime. ALMIS® has provided FSA reporting capability since 2010 but with the implementation of CRD IV and the subsequent demands of COREP and FINREP, the advantages of an IT platform for both ALM and Regulatory Reporting are evident.
The ALMIS® regulatory reporting module has been extensively developed to include an effective and time saving solution for FSA, COREP, FINREP and BoE reporting providing effective workflow management, validation routines, comparatives and full audit trails to allow for efficient management and full compliance. But all this reporting data can also be used to monitor and manage financial risks and help manage the balance sheet in a forward looking way.
The new regulations are placing significant strains on finance and treasury departments in Building Societies. As a result, there is a need to be as efficient as possible in how information is processed and interpreted, together with a requirement for consistency with assumptions and data models used to produce the analysis.
Whist some Building Societies have installed a combination of dedicated ALM software for asset liability management and separate regulatory reporting tools, there is a growing trend towards synergy – utilising the same IT platform for both activities. This consolidation of departments and management of regulatory reporting and balance sheet as an integrated activity is proving to be a successful strategy in managing resources and the complexity of data.
The reporting needs of prudential regulators and senior management are not so far apart and the detail of the new regulatory reports now required means that the same regulatory data can be used for balance sheet management purposes.
So the question even for the very largest Building Societies is, “Why have separate, disconnected products for these activities when they can be effectively delivered in one system”?
The advantages of a single system for Balance Sheet Management and Regulatory Reporting:
– A single version of the facts
– Increased scrutiny and therefore reliability within a single version
– Consistency of the assumptions applied
– Time savings loading and reconciling data
– Understanding the impact decisions have and the interplay between liquidity and capital, profitability and interest rate risk
– Building both the regulatory and economic requirements into forward plans
With increasing complexity of data, the growing need for proactive future planning and the continual demands of regulation, the adopters of a system that manages, monitors and reports in a fully integrated and auditable way must surely give those Building Societies a distinct advantage.