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Financial Instrument Impairment Assessor

FinReg’s FIIA software enables Credit Unions to assess and document their loan impairment provision in demonstrable compliance with accounting and regulatory requirements.

Loan book impairment assessment

Accounting standards, applicable law and regulation require Credit Unions to regularly complete a review and assessment of loan impairment provisions. Credit Unions must have a compliant loan provisioning policy and a loan loss estimation technique and estimation model. Boards and management are required to demonstrate that their impairment provisions comply with Financial Reporting Standard 102 and Central Bank of Ireland Guidance.

Your solution for compliant loan impairment provisions

FIIA is a RegTech software that enables credit unions to estimate their loan impairment provisions and to produce a loan book review report that demonstrates their compliance with accounting, legal and regulatory requirements.

FIIA assessments

FIIA enables Credit Union teams execute the key steps in loan impairment reviews:

  • documenting provisioning policies at the review date;
  • documenting key estimation technique assumptions;
  • capturing relevant data from loan systems;
  • completing assessment of “grouped loans” and of “individually significant loans” and reporting on the loan impairment provision.

Estimation technique & model

FIIA’s methodology has been designed in line with FRS 102. It reflects industry best practice such as Central Bank Provisioning Guidelines for Credit Unions (Apr ’18). FIIA’s estimation techniques and model allows credit unions complete:

  • Grouped assessments of loans based on a transition rate methodology;
  • Individually significant testing for specific loans and discounted cashflow calculations;
  • Application of judgmental grouped collective provisioning on cohorts of loans;
  • and Calibration of the FIIA estimation model via a configurable assumptions relating to loan which considered in default (e.g. 100% provision).

Features

Reporting

  • FIIA (utilising the Platforms Reporting Forge feature) provides users with a tailored report based on the inputs and outputs from their impairment assessment.
  • The reports are envisaged to form part of the CU’s reporting on their impairment assessments  to key stakeholders including the Board of Directors, external auditors and internal stakeholders.
  • FIIA also includes a full excel extract of the impairment assessment.

Integrated data capture

  • FIIA has been configured to be compatible with a CU’s existing ICT provider.  The CU can upload their loan book download.
  • FIIA reviews and validates the loan book to assess its completeness for the purposes of the impairment assessment.
  • FIIA calculates a grouped assessment of the CU’s loan book based on historic delinquency patterns applying a transition rate methodology.
  • FIIA facilitates full excel extracts of the transition rate inputs and outputs, for transparency purposes, which the CU can provide to external auditors.

Individually Significant Loans (“ISL”) and Grouped Provision Assessment ("Grouped")

  • FIIA includes a Grouped and ISL filtering function allowing users to select, refine and assign populations of loans for individually significant testing and judgmental grouped provisioning.
  • Grouped loans can be identified with a judgmental provision applied to the loans based on the users assessment of the cohort of loans.
  • ISL’s are subjectively assessed on an individual  basis via:
    • analysis of the loan performance and file via pre-defined loan tests;
    • review of indicative impairment of loans based on 12 month historic actual cash flows; and
    • application of a CU’s ISL provision impairment benchmarks.

Segregation of roles and levels of access

  • FIIA leverages the FinReg Platforms RUSO-Con functionality which facilitates access control of users.
  • The CU can define roles and access to staff and stakeholders including:
    • Impairment Assessment preparers;
    • Individually Significant testers;
    • CEO access and role; and
    • Board access and role.
  • Allows access to any individual, internal or external, without compromising data integrity.

Task management functionality

  • FIIA includes specific quantitative and qualitative workflows which may require multiple users to interact with each impairment assessment.
  • Each users interaction is managed via a tasks function which is accessible via the tasks screen.
  • The tasks screen allows the CU:
    • to keep track of the status of all task;
    • assign due dates for the completion of tasks;
    • add comments to tasks and receive notification on the updating of a task; and
    • manage the completion of tasks.

Reference documents, document upload, and tooltips

  • FIIA assists a CU in charting their course through an impairment assessment.
  • To assist FIIA includes the following:
    • on-screen access to core reference documents including financial and regulatory guidance and requirements;
    • on-screen tooltips to assist with users understanding of the specific requirements; and
    • the ability to upload supporting external documents to demonstrate relevant evidence obtained.

Tech Specs

  • Cloud based - AWS hosted
  • FinReg Platform - ISO 27001 certified
  • Embedded task management
  • RUSO-Con: Admin controlled with multi level user access
  • Full audit trail for all inputs
  • Security led read only access

Pricing

Please contact sales for pricing and tech specs.

Learn more

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