CRR3 & Basel IV
With the Basel IV / CRR3 framework now fully in force, as institutions transition into this new regulatory environment, it is critical for banks to move beyond preliminary gap assessments and focus on the ongoing alignment of their systems, data, and processes with the new requirements.
In the Basel IV post-implementation environment, banks and financial institutions are now facing two key challenges:
- Continuous compliance with CRR III/Basel IV rules and its requirements (e.g. mandatory SA calculations) to ensure banks regulatory readiness in sight of OSIs and audits.
- New needs in terms of capital optimisation arising from the newly introduced requirements, leading banks to explore innovative derisking solutions and RWA-optimisation techniques.
Finalyse possesses extensive experience in this field, supporting financial institutions in ensuring compliance with the regulatory standard and assisting with the analysis and implementation of RWA-optimisation techniques (e.g. CRM allocation techniques, securitization, SRT etc.).
How does Finalyse address your challenges?
Continuous compliance and improvement
Ongoing Standards Calibration: We ensure your frameworks stay aligned with evolving calculation standards and regulatory expectations.
Critical Data Element Review: Regular validation and refinement of critical data elements (CDEs) used in risk and capital models.
Post-Implementation Shortcomings Review: Identification and resolution of residual gaps and inefficiencies in current Basel IV/CRR3 implementations.
Business Requirements Documentation
Standardized Compliance Documentation: Using our proprietary tools and regulatory templates, we structure clear, audit-ready business requirements that reflect the implemented regulatory standards.
Traceability & Governance: Maintain regulatory alignment and internal traceability through structured and well-documented implementation frameworks.
Impact Analysis and RWA optimization
Portfolio Impact Monitoring: Analysis of capital impacts across exposure classes and business lines, allowing for proactive risk management and strategic planning.
RWA optimization attention: Dedicated focus on RWA calculation aspects for RWA optimization (CRR3 aftercare)
Seamless System Integration
Reporting System Integration: We support integration of Basel IV/CRR3 outputs into existing reporting infrastructures, ensuring consistency across systems and facilitating regulatory reporting.
Tool-Based Automation: Leverage Finalyse's standard integration tools to streamline data flow and reporting processes.
Strategic Business Advisory
Scenario Simulation and Strategic Planning: Our experts assist in simulating capital impacts under various regulatory scenarios, helping shape optimal strategic responses.
Exposure Class Distribution Analysis: Advanced analytics on output floor impacts across different exposure classes and risk types.
Output Floor Benchmarking, SA and IRBA RWA calculations
Standardized and IRB RWA Calculations: Using our proven methodology, we can perform full-portfolio SA and IRBA calculations, to meet benchmarking requirements under CRR3
Output Floor Monitoring Tools: Implement tools and dashboards to track and manage output floor metrics in real time, ensuring transparency and compliance.
Post-Go-Live Basel IV / CRR3
Advisory & Support
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1
Ingest & Enrich
- Exposures, collateral, ratings
- Automatic identification of data gaps and inconsistencies
- Easily adaptable input data model
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2
Calculate & Simulate
- CRR3-compliant SA and IRBA RWA calculations
- CRM allocation & impact simulations
- Scenario-based RWA analysis
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3
Decide & Document
- Clear RWA deltas
- Portfolio-level and exposure-level insights
- Outputs tailored for COREP, internal steering, and audits
Finalyse's experience in Basel IV/CRR III and capital optimisation
Financial institutions across Europe that Finalyse experts have successfully supported in adapting to the requirements introduced by Basel IV/CRR III.
Achieved billions in capital relief engaging through different capital optimisation techniques
Active supervisory dialogue and ECB preferred supplier for Pillar I capital adequacy missions.
Abishek Chopra is a seasoned Risk Management professional with over 12 years of experience in multiple areas of credit risk, especially on CRR and Basel guidelines. He has expertise in addressing complex regulatory topics such as credit risk mitigation for RWA optimization of different asset classes, Basel IV application of Whole Loan/Split Loan approaches for mortgages, SA-CCR and Securitisation.
Nathan Desmidt is a Managing Consultant with more than 8 years of experience in risk management. Nathan’s area of expertise lies within regulatory capital calculations, specifically in the context of CRR2/CRD5 and upcoming Basel 4/CRR3 regulations. Recently Nathan has been involved in the implementation of a new RWA calculator at a large financial institution aiming to enable Basel 4 compliancy, focusing on validation of RWA calculations in light of the new framework’s developments.
Maël Kerbaul is a Senior Consultant with over 15 years of experience in the banking and financial industry, especially in risk management. His main area of expertise lies in the credit risk management and regulatory capital calculation. He has developed a broad knowledge of Basel IV/CRR3 while he played a major role in the impact assessment of this new regulation at a large financial institution in Belgium. Maël has also a wide experience in data analysis for credit risk and has a good command of SAS EG and SQL.
