The Moody’s Analytics IFRS 9 solution has been specifically designed for banks, corporates, and insurers. It lets them automate and simplify the complex processes required to meet the new accounting standard.
To meet the needs of the market, Moody’s Analytics developed a comprehensive set of data and models that support the implementation of credit loss impairment calculations and integrate with clients’ internal systems. More than 150 firms globally use Moody’s Analytics data, forecasts, scenarios, models, and platforms for IFRS 9 compliance.
The challenges around the Expected Credit Loss (ECL)/Impairment calculations having the right parameters, models, and a platform to help with ECL estimates. While ensuring their models were relevant to the asset classes in scope for the calculation, financial institutions concentrated on procuring granular data with longer periods of coverage that was not available in-house.
Our solution won several fintech awards including, most recently, the RiskTech100® IFRS 9 Category leader. Read the post-award interview and press release.
Aozora Bank Selects Moody’s Analytics ImpairmentCalc™ Tool as IFRS 9 Solution
“The Moody’s Analytics solution is innovative and has matched our analytic needs for ECL calculation, serving as a strong foundation from which to prepare for future accounting rule changes in Japan. We also value the subject matter experts of Moody’s Analytics and their strong cross-border support in pursuing this initiative.”
» Extensive private and public firm (listed and unlisted) credit risk recovery and default data for different asset classes including project finance and commercial real estate.
» Loan-level consumer credit and structured credit data.
» Economic, demographic, and financial data for 180 countries and subregions as model drivers.
» Moody’s Analytics offers multiple off-the-shelf models: Commercial/Wholesale, Retail/Consumer, Structured Credit/Cash Flow Portfolios, and Public Firm. These models are transparent, auditable, and flexible to accommodate a client's needs.
» Our risk and finance consultants develop custom models for specific asset classes, or can help create hybrid models based on Moody’s Analytics and client data.
» Model governance and validation frameworks are in place for all Moody’s Analytics-provided data and models. Validation, back testing, and data quality checks are properly documented.
» We produce multiple scenarios that align with the scenarios’ probability distribution and our deep understanding of the global economy and potential threats. These scenarios extend through long future horizons to satisfy IFRS 9 lifetime requirements.
» Forecasts and alternative scenarios are available for 70+ countries and updated monthly. Moody’s Analytics provides a fully documented methodology and scenario narrative assumptions.
Solution Implementation and Automation
» Our advisory and implementation teams help clients navigate the path to IFRS 9 compliance.
» We work with institutions of all sizes to improve data quality, speed, and standardization of processes.
» We help banks and insurers address accounting standards while streamlining risk management practices.
» Our user-friendly, auditable platform offers data consolidation, model warehousing, expected credit loss calculation, and insightful analysis.
Arion Bank Selects Moody’s Analytics Technology for Basel III and IFRS 9 Compliance
“Arion Bank’s decision to use Moody’s Analytics risk and capital management solutions as part of our internal risk management framework was driven by the flexibility the solutions offer to support Basel III compliance, IFRS 9 implementation requirements, and streamlined regulatory reporting. The modularity of the solution supports our compliance needs, from Basel III and IFRS 9 to ALM and stress testing, from a strategic and integrated risk management platform.”
Given the requirements for insurers to comply with the IFRS 9 standard, Moody’s Analytics subject matter experts Roshni Patel and Nadja Roos shared insights on the current trends that insurers are adopting for the IFRS 9 challenge, and some best practices for modeling provisions.
Acceptable model methodologies and level of granularity
Current trends in the insurance market
A solution considering the challenges and linkages to IFRS 17
i9 Partners Selects Moody’s Analytics for IFRS 9 Calculations
“The breadth of macroeconomic data provided by Moody’s Analytics allows us to apply credible forward-looking scenarios for clients without the need for massive data samples. Their expertise, experience, and reputation were also very important to us in selecting a provider; our clients can always rest assured that best practices in credit measurement are being applied.”
Moody’s Analytics employs more than 80 economists, 20 data specialists, 70 researchers, and 20 credit analysts with extensive experience in loss forecasting, and data and model management. Our cross-functional expertise enables clients to draw on a range of support.
We have a global support mechanism to help our clients. Moody’s Analytics offers a dedicated program to ensure that our clients are achieving the best value and best results from the solution.
Completeness of the Offer
Our solution includes data, models, economic forecasts/scenarios, and advisory services integrated and automated into one platform. This comprehensive solution has long been our greatest differentiator in the market.
Our clients can integrate the IFRS 9 solution with other Moody’s Analytics solutions to address additional business cases, gaining efficiencies of integration and consistent data across their analytic platforms.
All IFRS 9-related methodologies, data governance, and scenarios that we offer meet IFRS 9 requirements and are fully documented and auditable.
The modularity of the solution allows users to complement client data and models with Moody’s Analytics overlays to provide more granular data for calculations.
The solution can be integrated with cash flow, risk, and finance systems, which gives institutions efficiencies and consistencies for their data and models. As a result, clients see greater economies of scale and opportunities for multiple use cases.
Management Analysis and Reporting
An automated feed can be established from the data warehouse to the general ledger for finance, with business reports and waterfall structures for overrides.
Data and models are updated bi-annually or annually to ensure all of the latest data has been captured. With every model update, we publish new papers on validation, governance, and results from the prior year. This approach offers transparency and auditability of the models and modeling process.
Connectivity to Other Accounting Standards
Our solution is linked to other accounting standards such as CECL. It provides global institutions with the linkages required for different regional reporting needs and helps them use consistent data, scenarios, and models for calculations.
Learn More About Our IFRS 9 Solution
Moody’s Analytics Credit Loss and Impairment Analysis Suite improves credit loss estimation analysis and calculations. Its data integrity, analytics, and regulatory reporting solutions offer a modular, flexible, and comprehensive IFRS 9 impairment solution that facilitates a bank’s efforts to calculate, manage, and report expected credit losses.
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Our Integrated, Modular Solutions
Moody’s Analytics can deliver a platform/calculation engine in different forms depending on the requirements for each country, such as an on-premises or cloud-based solution. We can meet local IT requirements and adapt the solution accordingly.
Our platform solutions are robust and flexible to accommodate the size and needs of any financial institution. Bringing models and calculation together, our platforms can be implemented as a standalone systems or fully integrated/automated solutions. The platform can be connected to internal accounting systems as well as any complementary Moody’s Analytics solutions.
An ALM system that offers integrated enterprise asset and liability management (ALM), funds transfer pricing (FTP), liquidity risk management, and business and regulatory reporting.
An expected credit loss (ECL) impairment calculation engine that produces loss allowance and converts internal rating or through-the-cycle probability of default (PD) to a compliant point-in-time PD term structure.