Scenario Expansion Manager (SEM)
SEM recognized in the Risk Markets Technology Awards 2021
The SEM Platform has been developed as part of CRISIL's industry consortium RISE (Risk Intelligence and Solutions Ecosystem), via a joint development process in conjunction with five large global banks.
The platform provides a centralized modelling framework to design, expand, analyze and track all regulatory and internal scenarios, while at the same time 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 to conduct modelling activities related to stress testing.
The SEM Platform contains the following features:
- Uploading of each subscribing financial institution's data to the platform.
- Input Processing of each subscribing financial institution's data on the platform, including data quality checks and corrections.
- Design of scenarios, including pre-expansion charts and visualizations.
- Expansion of scenarios using a large suite of analytical models.
- Model Testing of expanded scenarios, including accuracy statistics and post-expansion charts and visualizations.
- Capacity to perform manual overrides of expanded scenarios.
- Automated Processes to manage post-expansion workflow, including review, approval and audit trail for the final scenarios.
- Downloading of final scenarios and automated model documentation to each subscribing financial institution.
- Sharing internal scenarios between financial institutions to aid model development, reduce costs and contribute to industry best practices.
- Designing new types of scenarios, including COVID-19 scenarios, Trade War scenarios and scenarios which extend over longer modelling time periods such as Climate Risk scenarios.
Service Provider Information
CRISIL is a leading, agile and innovative global analytics company driven by its mission of making markets function better. It is India's foremost provider of ratings, data, analytics and solutions with strong track record of growth, culture of innovation, and global footprint. It has delivered actionable insights, and efficient solutions to over 100,000 customers through businesses that operate from India, USA, UK, Argentina, Poland, China, Hong Kong, Singapore and UAE.
Key Information
Use Cases
- Design, Expansion and Validation of Stress Testing scenarios for use by financial institutions in their Credit Risk models.
- Design, Expansion and Validation of Stress Testing scenarios for use by financial institutions in their Market Risk or Counterparty Credit Risk models.
- Sharing internal scenarios between financial institutions to aid model development, reduce costs and contribute to industry best practices.
Benefits
Process Enhancements: The SEM Platform provides an all in one solution, including data checking, analytical models and workflow management. Financial institutions are able to compare and contrast different modelling methodologies using the centralized platform and perform sensitivity analysis.
Cost Reductions: The SEM Platform uses a centralized infrastructure. This results in cost efficiencies through avoiding the potential duplication of each institution building its own set of scenario expansion models and infrastructure.
Reductions in Operational Risk: The SEM Platform provides transparent results and model documentation and is not a black box solution. It enables model validation to be carried out easily on the modelling methodologies used, results and approval process, including provision of audit trails.