Regulatory Transformation and Risk Modelling

The risk landscape is ever evolving globally, adjusting to advances in technology, growth in markets, and rise of emerging risks. This necessitates changes across multiple fronts – for institutions to transform how they operate, for stakeholders to recalibrate how they think, and for risk owners to reshape processes, systems, and models so they remain fit for purpose.

In Risk & Modelling Services (RMS), we provide end-to-end risk-related capabilities, frameworks, approaches, and modelling services to help our clients overcome multifaceted challenges and meet strategic objectives. We have strong capabilities on data management, banking risk modelling, insurance advisory services, and quantitative modelling and insights, cutting across various areas like credit risk, capital management, market risk, operational risk, insurance risk, and actuarial models. We are experienced in advising clients on regulatory standards such as IFRS 9, IFRS 17, and the Basel Accord requirements.

Beyond systems and models, we combine a ‘top-down’ and ‘bottom-up’ approach designed to obtain a holistic view of risks within an organisation. We provide risk advisory and consulting services which tackle enterprise risk strategy and management, regulatory response and transformation, third party risk management, culture and conduct risk management, and ESG risk management. Equipped with a team of fully qualified actuaries, financial engineers, and risk consultants, we look forward to collaborating with you and working towards understanding, capturing, and mitigating risks.

Banking risk modelling

Our large global network of experienced risk modellers have deep expertises and strong capabilities to support financial institutions in addressing the latest regulatory risk issues and tackle them with end-to-end risk modelling solutions across a full spectrum of credit, market and operational risk. We also assist financial institutions to build commercially efficient internal models with a forward-looking approach to help facilitate business stakeholders in smooth risk-based decision making, capital planning, marketing activities, and product developments.

As a regional practice, we are currently engaged in diverse model development and analytical projects for both regulatory and internal purposes covering various regulatory standards such as IFRS 9, Comprehensive Capital Analysis and Review (CCAR), and the Basel Accords and projects related to scorecards development, economic capital modelling and balance sheet and income statement stress testing, among others, with various international financial institutions across APAC.

Key focus area:

IFRS 9 and credit risk models
Operational Risk
Market and Liquidity Risk
Scorecard enhancement

AI/ML modelling
Digital banking
Deals support

Insurance advisory service

With a team of fully qualified actuaries and our network’s vast experience, we provide insurance and actuarial specialist services to clients to help our insurance clients on regulatory compliance, process improvement and producing actionable insights.

We have assisted our clients in their IFRS 17 journey, including aligning policies, methodologies and transitioning to their parent company, as well as local insurers from discovery to implementation. We also have experience in actuarial and finance modernisation, such as implementing or enhancing actuarial target operating models and operations, and insurance analytics, encompassing strategy, employee wellness modelling, mortality and morbidity modelling.

Key focus area:

IFRS 17
Insurance analytics, strategy and modelling
Actuarial modernisation

Valuations and risk-based capital
Audit support

Quantitative modelling and insights

With diverse and complex risk modelling experience across the region, we extend our quantitative modelling services to clients who need support in using their data to understand, quantify, and forecast their operations. We have assisted our clients in areas including attrition forecasting, macroeconomic modelling, and strategic workforce planning and retention optimisation.

Problem solving using advanced quantitative techniques has always been a hot topic in various operations. We can help you in quantitative research, analytics, strategy, and benchmarking engagements through systematic empirical investigations using statistical, mathematical, and advanced computational techniques.

Key focus area:

Operations modelling and visualisation
Demographic and workforce modelling

Healthcare Costing and Funding Modelling
System Dynamics modelling

Enterprise risk and regulatory management

The complexity of today’s risk and regulatory environment is unprecedented. To help you define and strategically approach not only for the relevant threats for your business but also to create opportunities, PwC brings together decades of global experiences to create an integrated approach that effectively manages risk, complies with regulatory requirements and drives your business strategy across South East Asia.

We support financial institutions in anticipating, understanding, managing and implementing regulatory compliance and reporting requirements. We also work with our clients in designing, benchmarking and re-engineering their enterprise risk management and control frameworks to adopt changing regulatory landscape, technological innovation and management priorities. By helping our clients with business impact assessment and articulation of new regulatory changes, we enable them to effectively respond to regulatory challenges and remediation.

Key Focus Areas:

Enterprise risk strategy and ERM framework design and modernisation
Global / regional risk governance optimisation
Business impact assessment and program management
Regulatory framework and policy and procedure design, implementation, and periodic reviews
Regulatory transformation and digital integration, benchmarking and insights

Regulatory response and remediation
Internal control review (RCSA, operational, IT)
Operational resilience including business continuity management (BCM) and resolution planning
Regulatory transformation for digital FIs / Fintech

Data management

The success of an organisation’s decision-making is heavily reliant on accurate outputs from their data aggregation and analysis. We help our clients fully unlock the potential of their data by supporting their efforts to jumpstart and enhance their Data Management capabilities.

As a regional practice, we leverage our vast experience across the network to support our clients in developing a robust data strategy and aid data-driven decision making. This includes definition and streamlining of data requirements, data sourcing, data transfer, data quality assessment, automation, and more.

We have successfully supported multiple global, as well as domestic systemically important, banks on their Data Management journey and were awarded the “Outstanding Project Award” for BCBS 239 (Risk Data Aggregation and Risk Reporting processes) implementation at the Regulation Asia Awards for Excellence 2018.

Key Focus Areas:

Enterprise-wide data strategy and target operating model for data-driven business decisions
Data Governance and Data Quality policies and procedures
“Build vs Buy” decisions for acquiring new data sets
Target state data requirements definition and gap analysis

Data quality assessment and monitoring
Data management processes and controls design and implementation
Metadata, master data and reference data management
Business case development to leverage emerging technologies to manage data, reporting and generate business insights

ESG risk management

With ESG becoming a key topic for most organisations, we are leveraging our deep understanding of our client’s business to help companies incorporate ESG considerations across a range of internal and regulatory requirements. This includes adapting ESG considerations in their Enterprise Risk Frameworks, Sustainability reporting and disclosures, developing a Net Zero Strategy, implementing ESG screening solutions, development of ESG ratings models and integrating it into the company’s overall risk management approach.

We assist our clients with Sustainability Impact Reporting for their portfolio of assets and exposures. We also work with clients on end-to-end regulatory and internal climate risk stress testing, scenario analysis and exposure studies to help them understand and quantify their climate risk exposures and provide better risk management planning under adverse scenarios.

Key Focus Areas:

ESG Risk Framework Assessment and Industry Benchmarking
Sustainability Disclosure and Gap analysis with industry standards like GRI, SASB (VRF) and TCFD
Carbon Footprint (GHG Emissions Scope 1/2/3) and Net Zero Strategy
ESG Screening, ESG Rating model development and integration with credit ratings

Climate risk scenario analysis and stress testing
Portfolio Sustainability Impact Reporting
Regulatory compliance support for new ESG Products like ESG Deposits, Sustainability-linked loans, Green Bonds, etc.

Culture and conduct risk management

As many firms have worked on transforming the way they operate in response to recent events like the COVID-19 pandemic and the increased use of new technologies, financial scandals, control failures, and ethical violations continue to persist. With this as the backdrop, market integrity, enterprise culture, and conduct risk have all moved to the forefront for a range of internal and external industry stakeholders, including regulators.

As a global practice, we help our clients assess their positioning, navigate the ever-changing regulatory environment, and evolve along with the industry. Combining people, risk, and compliance related capabilities, we partner with our clients to help them more effectively manage their organisational culture across divisions and regions to better position themselves to share the unified values, understand key people related risks, make informed decisions, motivate employees and in turn help to meet their business objectives.

Key Focus Areas:

Organisational culture and conduct risk assessments / surveys
Conduct risk framework, controls and KPIs design
Employee engagement and behaviour assessments

Conflicts of interest and incentive mechanism reviews and transformation
Fiduciary Duty and Suitability framework designs / review
Supervisory structure, and environment reviews

Third party risk management

With increased globalisation and digitisation, the use of third-parties vendors or service providers has become even more prominent whereby the range of risks and considerations pertaining to those relationships has also broadened. Our deep understanding and experience with various industry stakeholders, including executives, operations, consumers, and third-parties positions us to help our clients understand and address their various risk exposures related to third party relationships. Leveraging our team’s subject matter experts globally across multiple disciplines, such as cybersecurity, data privacy, anti-money laundering, financial crime, operational resilience, and compliance, we help our clients address specific third-party risk concerns as well as applying a holistic approach to the overall third-party management.

In addition to helping our clients address their specific objectives, we also share our experience and perspectives with our clients on working directly with various third-parties and being a third-party ourselves. In certain areas, we also partner with our clients to provide managed service solutions to help them better manage third-party risk as well as meet other key business objectives.

Key Focus Areas: