Scenario Expansion Manager (SEM)
Financial Institutions currently find it challenging to perform regulatory stress testing with high efficiency because of changing regulatory expectations. However, the scenario expansion methodologies, which are an important component of stress testing, have remained fairly consistent.
Risk identification, limit strategies, and revaluation processes may differ, but there are many similarities across data processes, scenarios, and models used in scenario expansion by financial institutions, which can be leveraged to create a common industry framework.
Most institutions have resource-intensive current processes for scenario expansion. They typically require considerable manual work, are carried out regularly and involve large amounts of market data and documentation.
RISE's SEM platform, which has won the Risk Markets Technology 2021 award for Best Modelling Innovation, provides a centralised framework to expand, analyse and track all regulatory and internal scenarios, while being generic, reusable and transparent.
This framework uses identified similarities to streamline the scenario expansion process, which allows financial institutions to share the operational infrastructure used to conduct modelling activities related to stress testing.
Value Drivers
- Centralised infrastructure
- Suite of analytical models
- Data management
- Diagnostics - tests and controls
- Automated documentation
- Workflow management with audit trails
Key Benefits
Process enhancements
- One-stop solution including data checks, diagnostics, visualisations and workflow
- Streamlined expansion process
- Improved accuracy of the reported results
Cost savings
- Efficiencies by avoiding potential duplication
- Automated reusable models and documentations
- Benchmarking capabilities providing actionable intelligence
Reduction in operational risk
- Transparent structure
- Robust approval and model validation process
- Reduction in manual efforts
Video and Brochure
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Scenario Expansion Manager
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FAQs
The SEM platform provides a single and all-in-one set of services comprising:
i. Unlimited data management;
ii. Data quality checks;
iii. Analytical models;
iv. Workflow management processes; and,
v. Model documentation
Comprehensive model documentation is provided as part of the SEM platform, which provides complete transparency into all analytical models used
Users will need to provide historical time series data for all risk factors modelled in the SEM Platform. Regulatory scenarios will be automatically included within the platform; users need to provide details of all other scenarios
RISE will develop user-specific interfaces to transfer user data into the SEM Platform and then return the final scenarios to the user's downstream systems
Additional models are developed using the 'R' statistical language and are then incorporated into the platform. Individual financial institutions can request that proprietary models be developed for their exclusive use
The SEM Platform checks all scenario outputs to ensure consistency, based on statistical analysis, including checks on whether output scenarios are coherent with input shocks
Press Release
October 11, 2024CRISIL jumps 12 places to 37th
in Chartis RiskTech100 2025
Press Release
June 18, 2024CRISIL wins Model Validation Tools and Accelerators category award, other recognitions from Chartis
Press Release
October 23, 2023CRISIL Ranked in Top 50 in Coveted Chartis RiskTech100 2024
SEM wins Best Modelling Innovation at Risk Markets Technology Awards 2021