The Current State of Banking Stress Testing Technology: Closing the Gaps

Regulators have shifted their focus from simply understanding the effects of stress scenarios on credit perfor­mance and revenue to making stress testing an integral part of a bank’s capital plan.

Stress tests are increasingly multire­gional, international and data-intensive. They require seamless, end-to-end execution of highly complex analytics at high speeds. Completing all of this work is consuming more of banks’ time and resources.

This paper examines the current state of stress testing capabili­ties of banks, with a focus on key areas of weakness – and proposes how banks can address them with strategic invest­ments in new capabilities.