AxiomSL, a provider of regulatory reporting and risk management solutions, has partnered with AlgoSave, a provider of credit modelling products, to meet the challenges presented by International Financial Reporting Standard 9 (IFRS 9).
Under the deal, AlgoSave’s expected credit loss (ECL) model will be integrated into AxiomSL’s solution for IFRS 9.
IFRS 9m, which will comes into effect in 2018, is a new accounting standard created to ensure the exposure of financial instruments to risk is better understood and accurately reported.
AxiomSL said that its solution will address the challenges of IFRS 9 by integrating the disparate data required by the standard, including risk and financial data, and providing rule sets to determine how financial instruments should be classified.
The solution displays the outputs in accordance with the IFRS taxonomy and can produce both standard IFRS and management information (MI) reports.
The company added that the challenges created by IFRS 9 include requirements for financial firms to calculate the ECL for their instruments and maintain capital provisions to mitigate the expected losses.
The partnership will allow AxiomSL’s clients to use AlgoSave’s CSF (Calibrated Stochastic Simulations of the Fundamentals of Borrowers) Credit Model to calculate the ECL for their instruments. The AlgoSave model will support corporate credit risk analysis, company valuation, and high-yield and distressed-debt investments.
AxiomSL CEO APAC Olivier Kamoun said: "Building and maintaining the PIT ECL model required for IFRS 9 promises to be a challenging exercise for many firms, so we are pleased to offer our clients the option of leveraging the model that has already been developed by our new partner, AlgoSave.
"This project with AlgoSave demonstrates our model integration capabilities. IFRS 9 is one of a number of new requirements, including BCBS 239, which call for greater integration between risk and finance."
AlgoSave founder Mikhael Botbol said: "We are delighted to announce our strategic partnership with AxiomSL, which provides a robust and effective environment to deliver AlgoSave’s IP and know-how to AxiomSL’s current and future clients."