How can technology advisers support banks

Dimitar Dimitrov is the founder and management partner at CaptiveA leading European AI & Custom Software software development company.

In the financial sector, current and pending significant regulatory updates reshape how banks manage capital, liquidity and dangers. Although these changes are intended to strengthen financial stability, they also require institutions to review their strategies.

Organizing a technology consulting company with extensive experience in the financial sector, I have seen firsthand how the evolving regulations reshape the banking sector. Basel 3.1 in the United Kingdom, Basel III’s Endgame in the US and other emerging regulations introduce stricter compliance requirements, increasing the need for technology -based solutions that enhance risk management, rationalizing the reference and optimization of capital efficiency.

The changing banking regulatory landscape

In the UK, the Prudential setting principle (PRA) It has described new standards for credit risk, capital requirements and reports, with the implementation starting on 1 January 2027 and a full transitional deadline of 1 January 2030.

Meanwhile, in the US, Endgame of Basel III The regulations are scheduled to enter into force on 1 July 2025, with a three -year period completed on 1 July 2028.

As both the US and the United Kingdom continue to promote a Digital Development Strategy for 2024 to 2030-In addition, developments in digital recognition systems, trust and privacy consultants will want to focus on modernizing their customers’ infrastructure and enhancing their regulatory processes. With the implementation of Basel 3.1 delaying the United Kingdom and the gradual abolition of Base III III gradually, technology advisers have been given a crucial window to help their financial customers use technology now to ensure that they are ready to comply.

Improve Credit Calculations Calculations

Financial institutions must review how RWA calculates with new regulatory requirements. Basel 3.1 enters a 85% risk weight For non -remarkable corporate reports, affecting the distribution of capital. Meanwhile, US equivalent requires banks to have higher capital buffers for various assets, increasing the need for accurate risk ratings.

For banks with important lending portfolios, these changes require a shift in capital distribution strategies, especially for media reports. Although these adjustments can lead to higher capital requirements, technology consultants can mitigate the challenges of their customers’ customers by developing AI risk modeling frameworks. And by incorporating real -time market data and forecasts, technology consultants can allow automated risk assessment models that reduce manual interventions and ensure compliance with regulatory compliance without excessive capital pressure.

Simplifying asset calculations (RWA) (RWA)

In the United Kingdom, Basel 3.1 introduces an output floor, demanding banks using internal models to maintain RWA at at least 72.5% of those calculated under the standard approach. This aims to reduce the excessive volatility of RWA and to impose greater consistency on capital calculations.

To comply, growth groups can help banks to implement automated solutions that facilitate RWA comparisons, monitor the adequacy of capital and activation notifications for the necessary adjustments. AI details can further enhance preventive capital design by modeling the impact of evolving regulatory thresholds, reducing the risk of unexpected capital deficiencies. In addition, instead of relying on manual upgrades, technology consultants can help banks incorporate advanced risk modeling tools to ensure compliance and preventive capital management.

Optimization of liquidity durability

Although Basel 3.1 does not immediately change the liquidity coverage ratio (LCR), PRA examines the liquidity risk frameworks, signaling possible improvements in stress management and liquidity management requirements. Similarly, US regulatory authorities evaluate liquidity scenarios in the context of Basel III’s Endgame, stressing the need for real -time risk monitoring.

Recognizing the challenges, financial institutions are increasingly turning to technology, as shown in ACCEDIA’s recent collaboration with a British bank. When the British bank approached Accedia for the first time, its main struggle was the fragmented liquidity report. Existing systems were based on lot processing, which means that risk groups were more frequently cooperated with outdated data during market instability. We also saw that stress test processes were extremely manual, leading to inconsistencies in script modeling and delays in risk response.

To build a solution that really suits their needs, we spent time with the people who knew the best systems – from risk managers to teams using reports daily. We asked questions such as: “What slows you up most during a standard reference cycle?” And “What will real -time ideas change for your daily decisions?” These types of conversations can help to form a platform that controls all compliance frames, making the work of a bank faster, clearer and more reliable. In our case, the final solution AI-A AI-powered liquidity platform, reported static reports with dynamic control panels and gave the team a constant view of their liquidity position so that they can remain in danger, not only to react to it. According to the bank’s survey, the custom solution reinforced real -time monitoring by 20% and reduced stress test time by 30%.

Reduction of operational risk

Although some regulations simplify business risk calculations, they may also require stronger real -time risk controls to detect vulnerable points early. Removal of Internal Loss Inner Loss (ILM) multiplier for banks using the standard measurement approach (SMA) can simplify operating risk calculations, but also increases the need for preventive risk monitoring. Without ILM -based adjustments, technology consultants will want to consider reinforcing real -time risk controls for their customers to detect vulnerabilities early.

In similar cases, technology consultants can support financial institutions by applying the detection of fraud in view of AD, prediction risk analysis and real -time surveillance systems. Understanding the complications of the various regulations allows consultants to develop customized risk management frameworks that reduce complexity while enhancing economic durability.

Improve Stress Tests

Software consultants can help banks align their stress -defined stress control methodologies to evaluate their durability against economic downturn, liquidity disorders and market disorders. Anxiety tests play a critical role in evaluating if banks have enough capital to withstand financial shocks. However, without advanced analyzes, these tests are often based on outdated data and rigid models, making it difficult to record the exposure to real -time dangers.

This is where prognostic analyzes and mechanical learning enter, allowing banks to simulate the market with great precision. Instead of relying on static models, software consultants can help financial institutions predict vulnerability of liquidity, giving them an advantage in risk management. As a result, they can preventively adapt their strategies and maintain sufficient capital market before economic disorders occur.

The future of regulatory compliance

Navigation in evolving economic regulations requires a preventive and technological approach. As Basel 3.1 and Basel III reshape capital, liquidity and risk management requirements, technology advisers play a critical role in this process, providing expertise in the risk modeling based on AI, automated regulatory reports.

Forbes Technology Council It is a community only for an invitation for CIOS, CTOS and world -class technology. Do I qualify?