EY to conduct a Breakfast Event on Early Warning Systems (EWS)
Ernst & Young (EY) Sri Lanka will be hosting a breakfast event on Early Warning Systems (EWS) on 22nd January 2020 at Mövenpick Hotel, Colombo 03 from 8.00 am onwards. The event will acquaint the participants with the fundamentals of EWS and the implementation of the same in banks. The event primarily targets the Chief Risk Officers and Chief Executive Officers of the banking industry. Early Warning System is a highly rated and productive technique deployed by top-tier banks and financial companies in the world, a welcome measure to cope with financial vulnerability. It is a framework of guided processes and rules to identify risk at a nascent stage which propagates implementation of a corrective action plan, incentivising early identification and reporting of stressed assets. The event is expected to lay the foundation for this ground-breaking technique which is yet to be implemented in Sri Lanka. The event also presents a valuable opportunity for participants to meet the members of the EWS implementation team and learn about the essentials of EWS.
The event will be graced by an eminent panel of speakers who are keen on sharing their knowledge among the participants. Sanath Fernando, Partner – Financial services at EY Sri Lanka will present an introduction to EWS, Ajay Sirikonda, Partner – EY India will discuss about the EWS implementation road map, Nimilita Chatterjee, Partner -Risk Analysis at EY India will also speak on EWS implementation road map, Rajith Perera, Partner/Principal – Financial Accounting Advisory Services at EY Sri Lanka will present a current state analysis and finally Sanjay Pantula, Senior Manager – Risk at EY India will be speaking on the challenges faced in implementation of EWS. The participants will also be given the opportunity to share their thoughts and resolve any issues related to implementation of EWS.
The participants will be educated on the current state analysis, five-stage credit life cycle, the need to implement EWS in this tech-era, challenges with respect to EWS expressed by banks and the EWS implementation road map. An EWS framework consists of two basic components: Credit Risk Management which enables identification of stressed assets, based on which corrective actions may be initiated to contain the deterioration of credit quality. The second component is Post Disbursement Compliance Risk Assessment which enables evaluation of the extent to which operational compliance to the banks’ specific internal procedures and guidelines have been adhered.
A comprehensive and well-structured EWS assists the top-level management to predict possible defaults from customers that may adversely affect the institution. Some of the key advantages of an EWS framework are its capability of identifying stress signals well in advance by leveraging data from internal and external sources, the ability to implement the proposed action plan until completion and the ability to assist in effective communication in triggered accounts to internal and external stakeholders.
By utilizing EWS, banks can alleviate the risk of non-performing loans and reduce the impact of payment delinquency whilst minimizing the likelihood of customer defaults, proliferating the collateral value of defaulted loans and decreasing the exposure of defaulting customers.
