Bhutan’s Largest Bank Implements Advanced Fraud Detection Methods

Ensuring Regulatory Compliance through Cutting-Edge Technology

Thimphu, Bhutan - In a significant move towards achieving regulatory compliance and enhancing its financial reporting infrastructure, one of the largest banks in Bhutan has adopted CARE Risk – ECL and FRA, a state-of-the-art solution that enables the bank to automate its Financial Reporting and comply with IFRS 9 norms.

The Need for Regulatory Compliance

The bank’s decision to implement CARE Risk – ECL and FRA was driven by the need to increase efficiency and productivity across the organization while ensuring that it meets the stringent reporting requirements set by regulatory bodies. The solution has enabled the bank to create a single database for analysis, thereby enhancing its ability to provide integrated reports and improving accountability, transparency, and integrity.

Challenges Faced During Implementation

However, the implementation process presented several challenges, including:

• Uncertainty over models and approaches: The bank faced uncertainty over the models and approaches to be used for computations under IFRS 9.
• Data quality issues: Data quality issues arose from a core banking system migration.
• Complex statistical computations: Complex statistical computations such as Probability of Default (PD) and Loss Given Default (LGD) posed challenges.

Overcoming Challenges with CARE Risk – ECL and FRA

To overcome these challenges, the bank implemented CARE Risk – ECL and FRA, which included:

• Robust data validation engine: A single data warehouse that acted as a robust data validation engine, sanitizing historical data availability, computation, and reconciliation issues.
• Automated computations: The solution enabled automated computations using a trigger-based approach.
• Historical data storage: Facilitated historical data storage required for PD and LGD computation.

Benefits of Implementing CARE Risk – ECL and FRA

The implementation of CARE Risk – ECL and FRA has provided several benefits, including:

• Efficient user audit trail: An efficient user audit trail, controls, workflow, authorization, and hierarchy approvals that were mapped as per the bank’s policies.
• Seamless auditor concurrence: Enabling seamless auditor concurrence.
• Fully configurable Reporting Engine: A fully configurable Reporting Engine that can be configured from the front-end by users to generate Risk-Based reports with drill-down feature till transaction level.

Conclusion

With CARE Risk – ECL and FRA in place, Bhutan’s largest bank has become the first in the country to comply with IFRS reporting norms, generating IFRS-set of financial statements seamlessly. The implementation has enabled integrated reporting, enhancing accountability, transparency, and integrity within the organization.