An integrated risk-based supervision solution based on best-in-class risk frameworks

Vizor Risk-Based Supervision

Vizor Risk-Based Supervision allows the Financial Regulator to record the results of both off-site and on-site supervision activities and combine this with automatically calculated Key Risk Indicators (KRIs). A risk assessment can then be performed before the overall Risk Profile of each Regulated Entity is set. Industry-wide and peer group risk reporting provide a macro view of risk to enable decisions on how to divert valuable supervisory attention to the highest impact entities. Supervisors can identify risks early and instruct the Regulated Entity to act to mitigate identified risks.

The Problem

Risk-Based Supervision requires a dynamic, cyclical process where the emphasis is on understanding and anticipating the possible risks to supervised entities and the systemic risk to the larger financial sector or indeed the overall economy. The demands on Regulators have grown rapidly and it can be a struggle to meet these demands. Regulators need a structured way to identify and assess risks so that they can allocate scarce supervisory resources commensurate with the identified risks.

The Solution

Vizor Risk-Based Supervision collates and leverages regulatory data to identify risks. It enables the use of KRIs to produce an integrated risk profile per Regulated Entity and then across the financial sector. It also includes out-of-the-box onsite inspection templates, Risk Profile, KRIs, reporting and processes to support risk-based supervision. A micro and macro view of risk is provided to support decisions about the focus, depth, duration and frequency of both on‐site and off‐site supervision, supervisory staffing needs and the best allocation of limited resources.

Key Features

A structured approach for risk-based supervision processes

  • Out-of-the-box KRIs With KRIs per sector that are auto-calculated on a quarterly/annual basis. This best practice risk framework accelerates the transition to risk-based supervision, offering a structured approach for each risk category.
  • Templates for inspections Templates that allow supervisors to record the key results of each scheduled or ad-hoc, on-site or off-site inspection against each risk category. Supervisors can set focus areas for inspections to ensure time is correctly allocated to the areas of highest risk.
  • Roll-up risk scores per regulated entity Collates the results of off-site and on-site supervisory activities with KRIs to produce a combined rating per risk category which rolls up into an overall risk score per regulated entity.
  • Timeliness of risk assessment Improves the timeliness of risk assessment by allowing supervisors and line managers to review, assess and approve the risk profile of each regulated entity as regulatory data is processed.
  • Industry-wide risk rating reports Produces industry-wide risk rating reports following the risk assessment of all Regulated Entities which shows the impact and probability for all entities in each sector, based on the latest supervision data.

Product Highlights

Set Impact and Gather Risk Data

  • An impact score (1-4) for each regulated entity is set annually by the supervisor based on appropriate metrics per sector (e.g. for Banking use BIS Guidelines for DSIBs).
  • Quantitative data required to calculate KRIs is scheduled for collection from Regulated Entities on a quarterly basis.
  • Regulated Entities enter the required data via web forms or upload data from MS Excel.
  • Data is automatically validated for completeness and correctness.
  • Automatically generate reminders for upcoming and overdue data.

KRI Review and Assessment

  • Once risk data is submitted, KRIs are automatically calculated based on previously calibrated thresholds.
  • Each entity’s supervisor is notified to review the KRIs and pending risk profile and record their recommendation.
  • Each KRI value for a Regulated Entity can be easily compared to other entities in its peer group or sector.
  • Once all KRI assessments for a period are completed, the line manager reviews and can override, approve or reject the supervisor’s KRI assessment.
  • On approval of the KRI assessment, the overall Risk Profile of an entity is updated.

Risk Dashboard & Reporting

  • The system provides industry reporting on completed Risk Profiles.
  • The following reports are available and can be easily filtered by sector & peer groups, Regulated Entity and time period:
    • Industry Risk Dashboard – overview of Regulated Entities’ Risk Profile over time
    • Risk Breakdown – list-view which allows the Regulator to drill into impact and risk ratings per category and sub-category
    • KRI Trend Analysis – choose a KRI and see how a particular entity rates against a selected peer group and entire industry over time