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Strategic Optimisation Toolkit under CRR/CRD IV

How Europe’s banks can look beyond the regulatory storm

Strategic optimisation toolkit under CRR-CRD IV

CRR/CRD IV, a turning point for the banking industry

After being on the rise for 30 years, financial economic activity fell in the wake of the global financial crisis, starting a new trend in European banking.

Studies agree that the ROE of European banks will be affected in the coming years. New banking regulatory requirements (CRR/CRD IV, EU mortgage directives, MIFID II, etc.) are considerably changing the rules of the game, particularly in terms of capital and liquidity, thus tightening the new level playing field and obliging banks to rethink their core and business strategy.

Some European banks already anticipated these changes and are currently adjusting to the new rules of the game. Ultimately, these efforts should decrease the adverse effect of the forthcoming changes. The banking industry sees this new era as an opportunity to equip themselves with the right tools that will secure future growth, transform their economies, businesses and cultures.

CRR/CRD IV, a turning point for the banking industry

Our response

In order to optimise client strategies, Deloitte makes it their mission to provide you with a personalised solution by considering both your business as well as external regulatory constraints. We help clients make strategic decisions and provide their institutions with the most suitable solutions in order to navigate the approaching regulatory storm. Our goal is to use our model and tailor it to your organisation. By doing so, we facilitate the strategic decision making process and best define the next actions by considering the combined effect of capital, liquidity and profitability.

As banks are looking to optimise their amount and cost of capital as well as liquidity and funding, it becomes increasingly challenging to generate profitable business.

Helping our clients to optimise their business model

Deloitte offers the Strategic Optimisation Toolkit, an integrated service solution which helps banks address the current and future challenges. Its goal is to provide you with an overall view of your assets, liabilities and key performance indicators as well as allow you to see how they interact to facilitate strategic decision making.

The Strategic Optimisation Toolkit helps you to:

  1. Optimise strategic decisions on bank and product-level by granting access to, among others:
    • LCR & NSFR costs
    • Required equity & impact on leverage
    • Operational costs
    • Profit contribution
  2. Perform scenario analysis using individual and flexible scenario forecasting up to four years ahead (balance sheet, P&L, capital, liquidity and Key Performance Indicator projections) to facilitate strategic decision making
  3. Benchmarking against  industry/peers on a set of key performance indicators

Key benefits

  • Increase the awareness of CRR/CRD IV impacts
  • Monitor the impact of key regulatory requirements
  • Ease the strategic management of the balance sheet
  • Adopt a comprehensive approach with a focus on both short-term profitability and long-term business sustainability
  • Enhance the management of investments and the structural liquidity profile
  • Simulate the impact of external scenarios
  • Determine the effect of strategic options
  • Follow the overall view on key ratios and figures
  • Link towards risk appetite and risk limits
  • Fine tune the Net Interest Margin
  • Show interdepencies among capital, liquidity and Key Performance Indicator
  • Improve speed of analysis

Strategic Optimisation Toolkit leverages the Horizon platform

The HORIZON platform developed by Luxoft provides customers with a rich graphical interface for the best  user experience. It offers dynamic access to your strategic dashboards; easy navigation across scenarios, risk indicators; and adds additional simulation possibilities using direct input variables. HORIZON provides decision makers with precise representation and comparison of the outcomes of the Strategic Optimisation Toolkit.

Horizon risk visualiser by Luxoft

The platform is a next-generation risk visualisation framework that provides an innovative user interface with a set of pre-designed risk dashboards for enterprise-wide credit, market, liquidity and operational risks consolidation.

It offers dynamic risk and performance data access using a graphically-rich app-based approach and a secure, high performance mobile interface.

It enables the SOT to bring risk transparency and decision making to a new level!

HORIZON industry recognition:

  • Winner of 2012 UK IT Industry Award for Business IT Innovation for Technology Excellence
  • FS Tech awards 2013 which recognises excellence and innovation in information technology

Contacts

  • Martin Flaunet
    Partner - Banking Leader
  • Marco Lichtfous
    Partner - Capital Markets/Financial Risk

Learn more

  • Strategic Optimisation Toolkit | Brochure
    New banking regulatory requirements (CRR/CRD IV, EU mortgage directives, MIFID II, etc.) are considerably changing the rules of the game for the banking industry.

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