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CLIENT CASE STUDY


Large Italian bank: Documenting AIRB IT architecture

Accenture helped provide a detailed overview of AIRB IT architecture to secure validation of internal models.

Overview

The outsourced IT service provider of a large Italian bank needed to provide the regulator with a detailed overview of the bank’s AIRB IT architecture to secure validation of its internal models for the capital requirements calculation related to credit risk. Accenture assisted the IT outsourcer to produce the documentation. The client is now able to effectively describe its strategy to implement the AIRB framework, a key requirement to obtain validation.

Opportunity

A large Italian bank is working towards adoption of internal models based on the Advanced Internal Rating-Based (AIRB) approach for the capital requirements calculation related to credit risk. As part of the AIRB framework validation process, the regulator (the European Central Bank Joint Supervisory Team) required a detailed overview of the bank’s AIRB IT architecture. Accenture’s successful track record in supporting leading banking groups to implement the AIRB IT architecture according to the Basel II Framework and in obtaining regulator validation led to its selection to support the bank’s outsourced IT service provider in the development of the necessary documentation.

Solution

Accenture supported the IT outsourcer by producing the documentation. The regulator required an overview of the AIRB IT architecture, a detailed description of the sub-items of the main architecture, and the supporting technical documents.

The Accenture team staffed at the IT outsourcer produced a master presentation of the overall AIRB IT Architecture, and a presentation of the sub systems and procedures. Technical documentation was produced by the IT outsourcer’s internal staff.

Results

Accenture provided the client with a robust, detailed and complete set of documentation that supports communication with the regulator. The documentation provides the client with the means to effectively describe its strategy to implement the AIRB framework for the capital requirements calculation related to credit risk – a key requirement to obtain validation. Through adoption of the internal models the bank will benefit, achieving consistent savings in terms of capital reserves, and through implementation of sound internal risk management practices.