Embedding IFRS 9 into operating models and processes and moving towards BAU with limited disruption

 By Louis Brown, Head of Credit Risk Modelling, Investec 

Louis, can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?

 I have been in banking since 2007 starting my career at RBS moving on to Barclays and now Investec. I have always worked in the Risk Analytics area particularly in Credit Risk Modelling. I’ve always been interested in using machine learning techniques in Credit modelling, particularly Supervised Learning methods. The current focus of my team is making Credit modelling more accessible and running our models as part of a “Software as a Service” platform. As well as the automation of standard duties.

What, for you, are the benefits of attending a conference like the ‘IFRS 9 Summit’?

It’s always good to get industry perspective on such a challenging project; like most companies affected by IFRS 9 we are going through our embedding phase and review of some of our weaker processes, coming to a conference like this you get fresh insights into how others are facing their challenges and can bring new ideas to your own.

What are the key considerations that need to be made when managing the impact on credit risk management and decisions made at organization?

This is an interesting question, and I guess it depends on the organisation. I believe the most significant consideration is the cultural change to risk management processes. It’s the hardest to manage as it involves people.

 In your opinion, how can we best use IFRS 9 metrics to shape business decisions?

IFRS 9 should be adopted into a Banks pricing framework and also Risk appetite as a Bank needs to account for the stage 2 volatility and changes that may be more cyclical.

How can risk professionals best manage streamlining regional discrepancies?

This is a difficult question, from a modelling point of view we always try and use consistent models where possible.

How do you see the impact of IFRS 9 evolving over the next 6-12 months?

I think the biggest exercise this year will be IFRS 9 model benchmarking, understanding where your models sit against other frameworks in the industry will be important not only for regulators but organisations themselves.