Morris Dancing, the Bubonic Plague and IFRS 9

Within walking distance of the old city and next to the largest green space in the city, the University of Edinburgh hosted a group of highly competent and international data scientists to discuss topics of interest. most important of the rating and credit. Control Conference XV. It was a natural choice for FICO's leaders to analyze being guest speakers – perhaps less obvious was the acceptance of the subject of my article, ] IFRS 9: Comply and Compete .

This session (probably to the disappointment of some but I hope to relieve others) broke the mold and focused more on the commercial impacts of this critical change in accounting standards, rather than the often highly technical modeling approaches required to help achieve compliance.

IFRS 9 changes the recognition of loan impairment from an "expected" loss to an "expected" loss, which requires new predictive models that increasingly bring the worlds of accounting closer together. credit risk. IFRS 9 has an impact on the financial impact of each credit decision during the customer's life cycle and also requires significant changes to key business processes, such as budgeting, stress testing, and stress testing. capital planning.

Understanding these impacts fully will require not only innovative, granular and responsive models, but also powerful software, excellent data management, and strong governance and coordination across many parts of the organization. The FICO Disability Management Solution addresses all aspects of this critically important problem.

IFRS 9 – Only a few weeks

As the first January 2018 deadline is imminent, more and more organizations are turning to compliance before the deadline to remain competitive in the coming years. The current impairment accounting standard (IAS 39) was introduced in January 2005, so it is reasonable to assume that life according to IFRS 9 is there to last at least a decade or more. Remaining competitive in the face of additional capital constraints imposed by IFRS 9 will require comprehensive solutions that take into account product design / pricing, underwriting strategy, line of credit management and recoveries, all areas where FICO is ready to help!

I have always enjoyed visiting Edinburgh, so I took the time to enjoy the city during the three intense days of networking and stimulating presentations. I wandered the charming and winding streets of the old town and took the time to learn life in the city in the 17th century taking the tour "The Real Mary King". s Close ". The streets were overcrowded, unhealthy and dangerous at the time – it is no wonder that up to half of the population died from the plague epidemic of 1645 bubonic. The quarantine methods were incredibly severe but almost understandable in the face of such an uncontrollable situation. Who knows how many lives would have been saved with modern medical techniques and methods of contagion modeling …

On the lighter side, organizers of the event also hosted a delicious gala dinner with traditional Scottish cuisine and Highland Dancing for entertainment. Although I am disappointed not to have won the quiz quiz contest (sample question: whose name follows in this sequence: Richard, Robinette, Bruce, Arnold, Danforth), I enjoyed the meal and the time that I spent with FICO participants and other participants in the event.

To read more about this event and FICO's participation, please read Mark Thompson's excellent article . For more information on IFRS 9, see these articles by myself and my FICO colleagues.

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