Summary

Click here to download the credit risk roundtable summary

Global banks have embarked on a journey to optimise their operating models for credit risk management amid increasing regulatory scrutiny and compliance costs.

The focus is on a 'target operating model' that will produce efficient outcomes by re-engineering processes, leveraging industry utilities, improving data management practices, and digitalising the credit risk assessment process. Customisability is also a much-desired aspect.

While the 'target operating model' needs for each bank differ, some best practices are emerging across the industry. Banks are:

• Aligning processes to risk exposures, credit profiles and costs of compliance
• Embracing utility-based solutions for exposures to large public entities 
• Building data management systems and applications that improve credit workflow and subsequent automation
• Digitalising parts of the credit workflow
  

To understand the best approaches and practices for arriving at the optimum model for banks CRISIL GR&A and Greenwich Associates (now a part of CRISIL), co-hosted a credit risk roundtable where discussions between senior leaders covered: 

• Processes suitable for re-engineering
• Intricacies of migrating work to a utility
• Trends in digitalisation of credit underwriting and servicing activities
• Near-term imperatives in credit risk management given the pandemic and regulatory obligations
  

CRISIL GR&A and Greenwich Associates also shared insights from a global digitisation benchmarking exercise, while industry experts shared their experiences.