Five simple steps to an improved CCAR submission process

CCAR Stress Testing Blog
May 11, 2016

Now that Comprehensive Capital Analysis and Review (CCAR) submissions are complete, it's time to take a well-deserved break, make it through your examination, and wait for the regulatory responses to roll in.

Meanwhile, don't miss this opportunity to take an honest look at your CCAR processes. Reserve dedicated time to do a thorough, high-level evaluation of your submission from start to finish. As you look backward, you're guaranteed to find areas of improvement for your future planning.

Start by following these 5 simple steps to roll forward with an improved CCAR submission process:

  1. Document your process
  2. Whiteboard and document your organization's core submission processes. Include supporting documentation, such as narratives, review and challenge, and other BAU processes and documentation.

    Make sure to clearly identify and document structured and unstructured data sources—both text and data. Take note to how those data are being aggregated and gathered together to create your submission and supporting documentation. Examine the final submission and supporting documentation and inspect how the reviews were conducted.

    This type of whiteboard visualization and record will be crucial as you analyze your process in the following steps.

  3. What worked well?
  4. Use your process document to note what worked well. You not only want to make sure you follow that process again, but you will glean insight into parts of the process that didn't work well.

    Also, there are always ways to continuously improve even the smoothest parts of your process.

    For example: Where did you gain the most efficiency from the previous year's submission?

    For all CCAR banks, this was not a new process. Even the newest CCAR banks had a "CCAR-like" submission last year. Through hundreds of conversations with customers, many found that analysis of the good process points yield learnings that can be used in other parts of the process.

  5. What were the most painful and most inefficient parts?
  6. Every large reporting process has tough points and constraints, from version control and collaboration to data governance and ticking and tying. Inadequate reviews, last minute changes, and even board presentations all have a way of getting in the way of process optimization. It's critically important to document and go over these "pain" points in order to fully understand them all.

  7. Is there a better way?
  8. With your documentation and full picture of the positive and negative parts of your submission process in hand, it's time to seek out others who have had similar issues. Looking for best practices both internally (organizational best practices) and also externally (industry best practices), will enable your team to leverage existing fixes.

    This is also the time to look and see whether there are new technological solutions to some of the process issues that could help your team become more efficient.

  9. Build your plan for next submission
  10. Finally, it is time to take all you learned from your deep dive and begin to document your next submission. What will you do differently? What will you keep the same? And most importantly, how will you measure yourself to know whether you improve year over year? Oh, and of course, how will you address any regulator feedback or changes in regulatory requirements?

Every year, annual stress testing and subsequent CCAR submissions, along with the maintenance and creation of all the affiliated documentation, provide several lessons we can leverage to find success and hidden efficiencies for future submissions. From content and data flow process and validations, to change management and governance, and review and challenge processes, there are always areas submissions can be improved upon.

CCAR reports and all of the supporting processes are in an advanced stage of evolution as regulator demands continue to change and expand.

In order to keep pace in a volatile regulatory environment, give the attention your team deserves to the right places in the most effective way. Start with these steps, and this year make it a point to evaluate your annual process. Seek out help where you have questions and always plan for the future.

Constantine Kokolis

About the author

Constantine Kokolis is a thought leader and subject matter expert on the power of enterprise documentation process transformation. He's spent the past three years consulting with some of the largest banks in the world to optimize financial and regulated risk reporting documentation processes, such as CCAR, DFAST, and resolution and recovery planning. He specializes in workflow process improvement, process design and architecture, and creating innovative solutions to complex problems. He also has extensive experience in project management and implementing process improvement strategies using LEAN and Six Sigma methodologies.