Client Testimonials

Below are some of the Case studies we have worked on

IFRS9 (Challenge)

Globally preparation to adopt IFRS 9 began with a review of all the asset types and the measurement of the material impact of adoption using an external consultant. Particularly in Zimbabwe results of initial assessment suggested that the banks could move to IFRS 9 immediately, with no application for a temporary exemption (in compliance with IFRS 4). Zimbabwean banking industry in migration from IAS 39 to IFRS 9 resulted in changes to the accounting treatment of different types of financial instruments and reporting resulting from manual processes to automation. Banking Industry and regulatory authorities were having challenges establishing principles for the latest financial reporting of assets and liabilities that presented relevant and useful information to stakeholders for their assessment of amounts, timing and uncertainty of their entity's future cash flows. IFRS 9 by nature brought huge requirements of volumes of data associated with cash-flows from assets classified under the standard.

What Capesso did:

The deadline for reporting under IFRS 9 was fast approaching, yet many financial institutions still had a long implementation journey ahead. With only a short time left in which to comply Capesso was approached by several financial institutions.  Capesso provided a solution that allowed the financial institution to actively incorporate risks into their decision making, and to deliver actionable customer, business line and profitability insights. In addition, the solution promoted a transparent risk management culture, as well as pervasive intelligence across financial institution's departments. Despite the financial institution's struggle to address the new requirements of the new accounting standard they were mandated to replace their traditional incurred loss model for credit exposures with an expected credit loss model, which called for the administration of internal criteria and management judgment, followed by regulatory reporting. This inevitably required risk and finance teams to work together to implement the new model.

ALM (Challenge)

The Zimbabwean Banking system has been changing and growing in a very fast way.Due to the pace of growth the local regulator called for the adoption and automation models and doing away with manual excel model however many banks did not only found it difficult to generate cash-flows but also faced mounting pressure from the stakeholders who consistently demanded measurement and management of their returns.Inevitably the banking sector like anywhere else in the world became competitive involving both the asset and liabilities characterised with changing interest rates as well as foreign exchange rates henceforth bringing pressure on the management of banks to maintain good profitability and manage liquidity glitches.

Hence forth a financial institution approached Capesso and wanted to measure and monitor interest rate risk, liquidity risk, foreign currency risk, balance sheet risks, gather data, measure risks, monitor changes, and act on decisions.The biggest restrictions found was related to the collection and preparation of the data bank, as well as the establishment of parameters for feeding the system, given the complexity and volume of operations. In addition, the following were detected: the need for support from senior management, dissemination of the role of Asset and Liability Management within related areas, training of teams, the issue of management centralization and pricing of assets and liabilities. The client also wanted a financial (analytic) tool for decision making that sets out to maximize stakeholder value with its main objective to make judicious investments that increase the value of capital, match liabilities and protect from disastrous financial events.

What Capesso did:

Capesso implemented and installed Oracle Asset and Liability Management at the bank which allowed the institution to automatically control and measure balance sheet sensitivity to currency fluctuation, and attach exchange rate scenarios to interest rate forecasts. The success in asset and liability management implementation was closely related to the governance process, to the existence of a committee which decides on this matter, to the training of staff members and the availability of the tool. The financial institution talked about the monitoring of portfolios, about the market and liquidity, the integration of investment and actuarial areas. Equally, the institution emphasized the support from senior management, although there was an investment policy based on ALM implementation. The impact obtained with the ALM implementation could be observed in the behaviour of the portfolios which become better adapted to the liabilities of foundations for a longer period of time. The adoption of an ALM culture was more welcomed, given that the need for planned objectives and beneficiaries was evident, and the efficacy of providing more grounds for investment decision making was demonstrated. Oracle Assets and Liability Management (ALM) became a systematic and dynamic process of planning, organizing, coordinating and controlling the assets and liabilities or in the sense management of balance sheet structure in the bank and became the biggest opportunity for the Zimbabwean banking system. This solution facilitated the bank towards measures and models every loan, deposit, investment, and portfolio individually, using both deterministic and stochastic methods.



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