SCRA under CRR III – On Track for the First Reporting Deadline

As of January 1, 2025, it’s official: CRR III is in effect, along with the Standardized Credit Risk Assessment Approach (SCRA). Banks and financial institutions must adjust their risk weighting more precisely than ever to optimize capital requirements and comply with regulatory obligations. While many are still struggling with manual processes, FinAPU clients are already benefiting from a fully integrated, DORA-compliant platform that automates SCRA assessments in real time.

However, the challenges do not end with implementation – the next major deadline is approaching: The first regulatory reports were originally due by mid-May but have been extended to the end of June 2025. This adjustment applies only to the first submission – the regulatory requirements themselves have been fully in force since January 1, 2025. While this extension provides financial institutions with more time for thorough implementation, it also increases the pressure to efficiently integrate the new requirements into existing processes.

Key Takeaways: What Has Changed with CRR III?
The first few weeks of CRR III have shown that many banks have underestimated the transition effort. The restrictions on internal models due to the Output Floor, as well as the new requirements for unrated portfolios, present significant operational challenges.

One crucial element is credit assessment, which has become even more important under CRR III. Banks must now conduct even more precise evaluations of their borrowers to meet regulatory requirements. Those still relying on manual processes or outdated systems risk not only higher capital requirements but also inefficient risk management.

Especially for banks that have relied on internal Excel-based processes, it has become clear in recent weeks that manual sources of error and inefficient processes make timely implementation difficult. A single incorrectly linked value in an Excel file can lead to capital requirements being calculated incorrectly - creating unnecessary risks for the bank.

More Time, More Opportunities – But Only with the Right Strategy
The extended reporting deadline gives banks an opportunity to critically assess and optimize existing processes. However, those who fail to actively work on implementation now risk bottlenecks when reporting in June.

• Challenges Banks Must Overcome Now:
  Optimizing Capital Requirements: Owner’s equity plays a crucial role in strategic capital allocation. Inaccurate calculations can lead to unnecessary capital binding.
• Monitoring the Leverage Ratio: Excessive debt can unnecessarily increase capital requirements. CRR III requires a more precise evaluation of the Leverage Ratio to ensure a stable capital structure.
• Automating SCRA Due Diligence Processes: Banks without external ratings should implement a fully integrated solution for automated SCRA-grade calculations.
• Ensuring Efficient and Error-Free Reporting: Excel is not a solution! Automated platforms like FinAPU SCRA eliminate manual errors and ensure complete, audit-proof documentation.

From Compliance Obligation to Competitive Advantage – How Banks Can Stay Ahead
Institutions that embrace automation now save time, avoid compliance risks, and gain a clear competitive advantage. With FinAPU SCRA, we have developed a fully automated, end-to-end solution that enables banks to transition immediately, efficiently, smoothly, and in full compliance with CRR III:

• Real-time SCRA grade calculation – ensuring transparent and compliant assessments.
• Fully integrated due diligence – ideal for institutions without external ratings.
• Automated workflows – reducing manual effort and increasing efficiency.
• Seamless integration into existing systems – ready to use within 48 hours, without internal IT effort.
• DORA-compliant – ensuring maximum security and regulatory resilience.
• ISO 27001 & CYBERTRUST-certified – guaranteeing the highest security standards and compliance.

Act Now to Turn Regulatory Challenges into Opportunities
CRR III has reshaped the regulatory landscape, but with FinAPU SCRA, banks can manage risks more precisely and optimize capital allocation more efficiently. Clear strategies make the difference – institutions that act proactively now secure not only regulatory compliance but also a strategic advantage in the competitive landscape.

By choosing FinAPU SCRA as a digital, automated solution, banks not only reduce implementation efforts but also lay the foundation for future-proof, efficient, and audit-secure risk management.