Improve pwECL using Machine Learning
The most significant impact on overall bank management is caused by the introduction of the Expected Credit Loss approach to reflect credit risk in external accounting.
IFRS 9 calls for the segmentation of financial assets on the basis of similar credit risk characteristics. For each segment, the expected credit loss needs to be calculated taking probability-weighted macroeconomic scenarios into account.
In contrast to the conventional segmentation/portfolio formation of loans, FlexFinance offers the ECL calculation on the basis of machine learning.