Ajay Katara

Navigating Basel III End Game – The Key to Future Compliance

09 September 2024
Knowledge Base

by Ajay Katara

The Basel guidelines, developed by the Basel Committee on Banking Supervision (BCBS), have evolved through three major iterations. Basel I, introduced in 1988, focused on credit risk, setting minimum capital requirements for banks. Basel II, launched in 2004, expanded the framework by including operational risk and enhancing risk management practices. Basel III, initiated in response to the 2008 financial crisis, introduced stricter capital and liquidity requirements to improve banking sector resilience. The Basel III Endgame (B3E) is the latest version of the reforms which are planned to be implemented by 2025 and will bring about significant changes in the US Risk based capital framework. Continue reading…

Leveraging Gen AI in Reimagining Credit Risk Management

10 June 2024
Knowledge Base

by Ajay Katara

Gen AI adoption is steadily increasing in many banking and financial organisations. Its applications are expanding into risk and compliance areas, with each risk discipline identifying use cases where Gen AI can enhance efficiency by providing better insights, cost benefits, and faster turnaround times. Within the enterprise risk function, credit risk management is a primary financial risk function that significantly impacts many banking organisations. Over the past 15 years, credit risk management has matured through numerous regulatory mandates and transformation initiatives. However, there are still many areas within this function that can benefit from the adoption of generative AI. Continue reading…

Ajay Katara

Ajay Katara

Consulting Partner and Head the RegTech Portfolio in Banking Risk Management area at Tata Consultancy Services (TCS)

Unraveling Risk and Compliance Trends in 2024

07 February 2024
Knowledge Base

Over the last few years, risk and compliance function has been a top priority for many banks and financial services organisations, with initiatives spanning across adoption of newer regulatory compliances, stress testing, model risk management, and focus on emerging risks like climate risk, to name a few. Come 2024, as per industry reports, the spend in risk and compliance is expected to grow by 14% in 2024 with the spotlight around heightened regulatory scrutiny, newer regulatory initiatives, and technological adoptions to drive optimisation and efficiencies within the function which will eventually help to meet the business demands and expectations for 2024 and beyond. Continue reading…

Ajay Katara

Ajay Katara

Consulting Partner and Head the RegTech Portfolio in Banking Risk Management area at Tata Consultancy Services (TCS)

Gen AI Use Cases in Risk and Compliance

30 November 2023
Knowledge Base

Generative Artificial Intelligence or Gen AI as it is popularly called has recently emerged as a technology enabler which is seeing a lot of use cases across the banking industry. Currently, many banks are trying to experiment with this new tool and understand amendable areas that can benefit from this technological intervention. Adoption patterns currently indicate that many banks and financial institutions are starting small with internal use cases to understand and analyse the efficacy of this intervention. Within the banking sector, Gen AI has a lot of applications in the risk and compliance value chain across areas of Risk Identification, Risk Assessment, Risk Monitoring and Risk Reporting. As per industry estimates, market size is expected to grow at a CAGR of 34% (approx.) in risk and compliance management. Given the focus of regulatory scrutiny on the adoption of Gen AI in the risk and compliance function, currently the initial set of use cases are more focused on augmenting the existing functions rather than fully automating them, hence the adoption of Gen AI is slowly but steadily progressing. Integration of Gen AI with the existing RegTech tools can yield a lot of benefits in terms of improved automation and cost savings which will make the current processes more efficient and also enable near real time decision making as well in certain risk and compliance functions. Continue reading…

Leveraging Gen AI for Basel III End Game Compliance

21 November 2023
Knowledge Base

by Ajay Katara

Basel III end game is the latest update to the US Capital requirements which will bring about sweeping changes to the existing capital requirements in place for the US banks. Under the existing provisions there are two approaches which apply to US banks. The standardised approach applies to all banking organisations (other than community banks) and advanced approaches apply to category 1 and category 2 US banks, and they must also compute Risk Weighted Assets (RWA) under the standardised too. The US regulators have proposed July 2025 for compliance with new requirements with a three-year transition period ending in Jun 2028. The new regulation will bring about a lot of changes and will fundamentally apply to banks with asset sizes greater than USD 100 Mn with specific changes applying to banks designated between category 1 to category IV. Continue reading…