New financial services solution reduces costs and more effectively manages data for CCAR models
NEW YORK and PALO ALTO, Calif. Sept. 30, 2015 — Deloitte, a recognized leader in analytic services, and Cloudera, the leader in enterprise analytic data management powered by Apache Hadoop™, today announced the availability of a solution built to address financial services industry (FSI) challenges meeting regulatory compliance of comprehensive capital analysis and review (CCAR). Deloitte’s CCAR solution leverages Cloudera Enterprise to provide cost savings, operational efficiencies, and increased flexibility in financial services firms’ regulatory data management environments to accommodate future regulatory changes.
Maintaining the large volumes of data needed to perform stress tests has traditionally been a significant effort. This data grows rapidly, and as a result, periodic system upgrades are needed in order to increase memory and storage for quarterly and annual CCAR report processing and model development, validation, and archiving. Regulations are also continuously evolving. The annual CCAR supervisory rules specify new scenarios and datasets to be used in credit risk, liquidity risk, market risk, pre-provision net revenue (PPNR), and capital management models that generate the forecasted stress estimates. It can be costly and time consuming to integrate the data required for CCAR and then to develop and run the models quarterly, yearly, or even more often.
To combat the difficulties associated with traditional CCAR solutions, Deloitte has harnessed the power of Hadoop through Cloudera Enterprise. The Deloitte-designed solution includes accelerators to streamline data selection, data quality, variables conversion, data ingestion and management, and to convert or migrate models to the SAS DS2 (to be released) or Apache Spark/Python programming languages.
The practitioners and data scientists of the banking and securities analytics practice at Deloitte understand how risk, forecasting, and CCAR models work, and have significant experience using Hadoop frameworks as well as Spark and SAS. Led by David Rudini, principal, and Prince Nasr Harfouche, senior manager, both in Deloitte Consulting LLP’s analytics practice, Deloitte has built accelerators in Spark supporting a wide variety of use cases. The accelerators can reduce the cost and risk of migrating existing CCAR models to run in an open source environment (e.g. Spark) or to take full advantage of SAS DS2 once it is released.
Visualization and dashboard tools included in the solution also allow users to interact with the results of stress tests so they can quickly identify trends and potential sources of risk. Furthermore, the scalability of Cloudera Enterprise ensures that new data can be added to the platform in perpetuity.
“The current regulatory environment that our clients face is more complex than at any time in history,” said Ashish Verma, director, Deloitte Consulting LLP, and leader of hybrid services and innovation in the information management practice. “This complexity in regulation has led to complexity in data management, making compliance very costly with little benefit to the business. With Cloudera, we are now able to offer our clients a cost effective solution that enables CCAR compliance in a dynamic regulatory environment. And by storing this data within Cloudera Enterprise, companies can perform additional non-compliance analysis and potentially develop a deeper understanding of their businesses.”
“Cloudera is excited to team with Deloitte on this solution,” said Tim Stevens, vice president of corporate and business development at Cloudera. “We view our platform as the most capable foundation for compliance in the market because it has the capability to adapt to new regulations in a cost effective manner. It is massively scalable, secure through Cloudera Navigator, and easy to manage through Cloudera Manager. Deloitte’s deep expertise in the field of financial services enabled the development of a solution that financial services companies tied to CCAR regulation will benefit from.”
Read the Deloitte and Cloudera solution brief:http://www2.deloitte.com/us/en/pages/about-deloitte/articles/deloitte-technology-alliances-cloudera-brief.html.
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