CreditDimensions Comprehensive Capital Analysis and Review (CCAR) Solution

Edison, New Jersey - 1 June 2015

The Comprehensive Capital Analysis and Review (CCAR) is an annual exercise by the Federal Reserve to ensure that certain large financial institutions operating in the United States have robust, forward-looking capital planning processes that account for their unique risks and sufficient capital to continue operations throughout times of economic and financial stress. As part of the CCAR, the Federal Reserve evaluates institutions' capital adequacy, internal capital adequacy assessment processes, and their plans to make capital distributions, such as dividend payments and/or stock repurchases. The CCAR includes a supervisory stress test to support the Federal Reserve's analysis of the adequacy of the firms' capital. Boards of directors of these financial institutions are required each year to review and approve capital plans before submitting them to the Federal Reserve.

The Solution

By providing the bank the expertise of the CreditDimensions Professional Services group, this data remediation project was delivered early, in two months’ time and quickly improved the data quality and accuracy needed for CCAR compliance. Credit Dimensions is now an integral part of the qualification and management aspects of the loan pre-application process. Credit Dimensions has improved the overall data quality, accuracy and formatting ensuring CCAR compliance readiness and successful data submission on an Annual, Quarterly and Monthly basis by providing data lineage for the various business lines, mapping each line of business to the central data repository and performing data quality checks to validate that the various data repositories were in sync.  CreditDimensions has shortened reporting time, improved the accuracy of the data elements and has given management a valuable process to remediate data errors.

The Challenge

Recently a banking client of CreditDimensions sought to improve their data quality to comply with their CCAR reporting.  The data elements required for CCAR were not in sync and were captured in multiple systems across the bank’s different branches.  In addition, data elements were not in a format which could be used for submission.  The data elements needed significant remediation to eliminate the gaps in data quality, availability and accuracy due to manual storage and verification of loan data.  Lacking transparency and a complete view of customer master data across all lines of businesses, CCAR reporting was a challenge using the existing resources and processes.

The Requirements

The bank required that the solution accurately scope the data elements for CCAR compliance and efficiently generate data files needed for CCAR stress testing by consolidating, standardizing, reconciling and formatting the data from multiple systems across various business lines.  An additional requirement was to report the data in the format required by the Fed, to ensure the accuracy of their CCAR reporting.  Any solution needed to identify and remediate any errors and omissions in the bank’s process and gain greater ongoing insight into CCAR data defects and key compliance indicators in order to provide transparency across the organization.

CreditDimensions  continues to be a true “solutions provider” to my firm and as a partner you will never lose sight of critical data elements as the project rolls into steady state.”- Chief Data Governance Officer of the bank

Next Steps

Leveraging industry standard models for consumer banking business, subject matter experts are working on data models that could be executed on industry standard Master Data Management software.  These models are mapped to various schedules under, The Capital Assessments and Stress Testing Report (FR_Y reporting).  A baseline version of edit check catalog is available for building data quality and remediation program.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development