FAQs FinAPU SCRA

What is FinAPU SCRA?

FinAPU SCRA is a complete solution from FinAPU for the Standardised Credit Risk Approach in accordance with the requirements of CRR III. Our end-to-end solution calculates the required risk weights for credit institutions for their unrated banking exposures and enables them to reduce their capital requirements.

FinAPU SCRA not only automates and simplifies the process of calculating risk weights and due diligence, but also provides in-depth analyses and enables efficient data management. With FinAPU SCRA, we have developed the technical, contractual and functional solution for banks to implement the SCRA approach. Find out more: Kreditrisikostandardansatz, nahtlos und automatisiert

Who is FinAPU SCRA intended for?

FinAPU SCRA is aimed at all credit institutions that need to implement the new SCRA approach - especially for their exposures to unrated banks.

In addition, banks based in countries that do not allow the use of external ratings for regulatory purposes need our SCRA solution to calculate their unrated and foreign bank exposures.

How does FinAPU SCRA differ from other options for implementing the new Basel III/CRR requirements?

FinAPU SCRA differentiates itself from other options on the market through several key factors. These differentiators position FinAPU SCRA as an end-to-end solution for banks seeking an efficient, accurate and user-friendly platform for Basel III compliance and beyond.

• Everything from a single source: With the SCRA tool, FinAPU offers the functional, technical and contractual solution for the new SCRA approach under CRR III. Implementation is completed in just a few days, also because everything is contractually and data-wise anchored in Austria. FinAPU SCRA fulfils all the requirements of the new CRR Article 121.
• Competitive pricing model: With FinAPU SCRA, all customers benefit from our cost structure, which is particularly attractive due to the distribution across our extensive customer base. In addition, the prices are always dependent on the scope of use. All standard interfaces and user customisations are included in the price.
• Calculation of SCRA ratings: In contrast to many other products and providers, FinAPU SCRA enables the calculation of SCRA grades (A, B, C) and not just the delivery of data. This implies a decisive advantage: with FinAPU SCRA, the relevant and objective information is available at the click of a button, without having to invest your own resources in processing and analysing the data. 
• User-friendly front end that replaces manual and error-prone tools: Another key advantage of FinAPU SCRA is its intuitive and user-friendly front end, which makes the use of complicated and error-prone Excel spreadsheets obsolete. Instead, the user interface of our platform is audit-proof, easy to understand and navigates users efficiently through the functions. All data is easy to view and reports are generated at the click of a button. 

This approach not only significantly optimises the user experience, but also ensures that data management and analysis is more secure and reliable. This ensures that all requirements under Article 79 CRD IV are met.

To summarise, FinAPU SCRA offers a unique combination of intuitive technology, automation and ease of use. Unlike other products, our tool addresses all the challenges banks face in implementing Basel III/CRR as a holistic solution while improving the efficiency and accuracy of risk assessment.

How do banks benefit from FinAPU SCRA?

The use of FinAPU SCRA massively reduces the capital employed, in some cases the risk weighting is reduced from the current 100% to 30%.

When will the first test version of FinAPU SCRA be available? 

The test version of FinAPU SCRA will be available from April 2024.

How much time/resources will I save with FinAPU SCRA compared to using a pure data provider?

The modern front end, automatic interfaces and included workflows and authorisation structures make calculating SCRA grades quick and easy. The relevant information is available immediately and decisions can be made more quickly and on a more sound basis. In addition, the data coverage in FinAPU is considerably better thanks to the use of data analysts.

What effort is involved for me as a bank in my daily work with the tool?

Hardly any effort is required on the part of the bank; depending on the implementation of the due diligence checks, an audit may be necessary once a year.

How does FinAPU SCRA support banks in the due diligence of counterparties with an external rating?

FinAPU SCRA supports credit institutions in the due diligence of externally rated counterparties by providing a platform that enables an in-depth analysis of the risk profile. The software helps to check the appropriateness of the risk weightings derived from external ratings. If it turns out that the external rating does not adequately reflect the actual risk, FinAPU SCRA enables the application of an appropriate, possibly higher risk weight in accordance with regulatory requirements. All processes can be finalised in an audit-proof manner using workflows based on the 4 eyes principle.

How does FinAPU SCRA ensure that clients can comply with the requirements of Article 113, paragraph 1 (Due Diligence)?

FinAPU SCRA integrates the entire SCRA requirements into a workflow that is confirmed by a four-eye principle between the market and risk departments. A distinction is made between manually confirmed SCRA grades and automatically generated grades to ensure compliance.

How are the SCRA grades calculated within FinAPU SCRA?

The SCRA grades are calculated by comprehensively analysing the financial stability and risk position of an institution. This includes the assessment of CET 1 Ratio, Tier 1 Ratio, Total Capital Ratio and Leverage Ratio against institution-specific or country-specific minimum requirements. It is also possible to benchmark NSFR and LCR. Our platform uses both automated data feeds and the option of manual intervention to ensure accurate and up-to-date valuations.

What distribution of SCRA grades can be expected?

Based on initial test calculations, we expect that more than 80% of the rated exposures will fall into the A range.

How is the credit risk assessed in accordance with Article 121 of the CRR for the calculation of the SCRA grade?

Credit risk is assessed using the FinAPU bank rating, which is based on a model that has been tried and tested for 14 years and is used by over 40 customers. This model is validated annually, tailored to customer needs and is independent of ECAI ratings. The FinAPU bank rating is an integral part of the FinAPU SCRA package.

Is there a risk of poor data coverage at smaller banks in Austria and Germany that could lead to a C rating?

No, we actively minimise this risk. Smaller banks are analysed in detail by our analysts by importing the EU KM 1 data sheet directly into FinAPU SCRA. This procedure ensures high data coverage and quality.

Does FinAPU SCRA offer the option of manual data entry?

Yes, our tool allows manual data entry, whereby all entries are documented in an audit-proof manner.

Can I make manual adjustments in FinAPU SCRA?

Yes, FinAPU SCRA offers the option of manual interventions and overrides directly in the platform. This enables users to take specific requirements and individual risk assessments into account. All manual interventions are stored in the system in an audit-proof manner and are also visually recognisable.

How often is the SCRA data updated in FinAPU SCRA? And are you actively notified of relevant changes?

With FinAPU SCRA, our customers always have the latest SCRA data at their fingertips: Thanks to daily updates and the integrated, automatic monitoring of SCRA grades. Customers are also informed about SCRA changes directly by e-mail or on our platform. This makes it possible to always have the relevant information available, even during the year, and to react to changes if necessary.

What does FinAPU SCRA cost?

With FinAPU SCRA, all customers benefit from our cost structure, which is particularly attractive due to its distribution across our extensive customer base. In addition, our prices are always based on the individual scope of use.

How long does the implementation of FinAPU SCRA take?

It can take just a few days from the initial consultation to full utilisation of FinAPU SCRA.

Are there any specific technical requirements for implementing FinAPU SCRA?

No, FinAPU SCRA integrates seamlessly into existing systems.

How is security and compliance guaranteed in FinAPU SCRA?

FinAPU SCRA guarantees the highest security and compliance standards by integrating SCRA grades into internal workflows with a dual control principle, audit-proof data archiving and the provision of all data and results via secure API and interface access. This makes all processes transparent, traceable and compliant with regulatory requirements.

How does FinAPU SCRA guarantee compliance with the current regulatory requirements of Basel IV and CRR III?

Our implementation concept is based on a detailed interpretation by FinAPU of the legal regulations for SCRA and the relevant legal framework, including CRR III, CRD IV, Basel III and Basel IV. This interpretation is described in detail in our specialised concept. This concept describes the implementation of the regulatory requirements in FinAPU SCRA.

How does FinAPU SCRA help with CRR/SCRA compliance?

FinAPU SCRA helps credit institutions to efficiently fulfil the extensive requirements of the CRR and SCRA by providing an automated solution for risk assessment and compliance reporting. It makes it easier to obtain, analyse and evaluate the necessary information on capital adequacy and enables a precise assessment of capital requirements, also taking into account specific national regulations and requirements in EU third countries.

How can I find out more about FinAPU SCRA?

For more information about FinAPU SCRA and how it can help your institution to fulfil the Basel III requirements efficiently, please take advantage of our free initial consultation: Start now | finapu. We will be happy to give you the opportunity to familiarise yourself with the many functions and advantages of FinAPU SCRA at any time by means of advice and demos.