The worldwide implementation of the new standards will occur on January 1st , 2018 but Canada will be adopting them earlier, on November 1st, 2017. This marks the end of the fiscal year for major banks in Canada, which takes place in October. The new standards are likely to increase the workload across banking and financial institutions. As such, many banks are analyzing new approaches that may be taken to ensure regulatory compliance promptly.
IFRS 9 – What Is It?
The acronym IFRS stands for International Financial Reporting Standards. IFRS 9 Financial Instruments is a new accounting standard that was created to simplify financial instruments management. The current IAS 39 standard used by the financial services industry is complex and considered inadequate. Hence, it will be replaced by the new IFRS 9 standard.
Banking and Big Data Requirements
The new IFRS 9 expected loss models will require data at a much more defined level than ever before. The impact on banks and financial institutions is significant and evident across many different levels.
Common challenges cited include the following:
- More data ingestion will be required as disclosure and reporting requirements increase.
- Risk management will require closer and more nuanced risk models to work with.
- New requirements will be associated with supporting the details between valuation and provision adjustments by drill down.
- Annotation and metadata management will increase as justification occurs between income statement figures and the new balance sheet.
This requires a higher emphasis on the control environment, workflow, and ability to adjust, interrogate and give commentary on changes at a very detailed level.
If your organization is concerned about the new IFRS 9 regulations and you are searching for solutions to ensure compliance, please contact us to learn more.
