At Cogniwave Dynamics, we have made risk management and regulatory compliance a central pillar of our support for financial institutions. Operating at the crossroads of operational, technological, and regulatory requirements, we assist risk departments, finance divisions, and compliance functions in understanding, implementing, and automating the complex demands imposed by French, European, and international regulators.
Our added value lies in our ability to integrate AI, machine learning, and RAG-based solutions into regulatory frameworks to streamline regulatory reporting, accelerate quantitative and qualitative analyses, while ensuring traceability and compliance of processes.
In-Depth Expertise in Basel Accords: Basel III, IV, and V
Basel III – Post-crisis capital strengthening framework
Implemented following the 2008 financial crisis, Basel III introduces a series of structural reforms aimed at enhancing the resilience of the banking sector. Cogniwave Dynamics supports:
- The calculation of solvency ratios through automated prudential data aggregation tools.
- Analysis and projection of the leverage ratio, including off-balance-sheet exposures.
- Liquidity risk management (LCR, NSFR) using simulation and regulatory constraint optimization tools.
- Monitoring of capital buffers.
Basel IV – Overhaul of Risk-Weighted Asset Calculations
Often referred to as « Basel IV, » this reform entails a major redesign of regulatory capital calculation methodologies. We support our clients in:
- Implementing the Standardised Approach for Credit Risk (SA-CR) as an alternative or complement to internal models (IRB).
- Adapting to the new Capital Floor requirements, which limit divergence between standard and internal approaches.
- Integrating the SA-CCR (Standardised Approach for Counterparty Credit Risk) for derivative exposures.
Basel V – Toward Greater Standardization and Integrated Supervision
Although not officially named « Basel V » by the Basel Committee, this term is commonly used to describe the current phase of global harmonization and convergence of regulatory standards.
Complementary Regulations: Comprehensive Sector-Specific Coverage
MiFID II
We help institutions meet transparency, product governance, best execution, and transaction reporting obligations under MiFID II through:
- Automated analysis of market data and client flows.
- Algorithmic transaction monitoring to detect market abuse (MAR/MAD II).
- Documentation and traceability of financial advice.
UCITS & AIFM
Cogniwave Dynamics assists asset managers with:
- UCITS/AIFMD regulatory reporting via portfolio data consolidation tools.
- Compliance with remuneration policies, liquidity ratios, and delegation controls.
- Integration of ESG indicators into management models.
GDPR
Our experts in privacy-by-design and AI compliance support institutions in:
- Mapping and pseudonymizing sensitive personal data.
- Ensuring GDPR compliance of AI processing.
- Auditing explainable AI (XAI) to enhance algorithmic decision transparency.
FATCA / CRS
We support the automation of FATCA/CRS eligibility checks and tax report generation by facilitating:
- Classification of U.S./non-U.S. clients.
- Automated form completion.
- Structured submission to tax authorities in standardized formats.
FRTB (Fundamental Review of the Trading Book)
Our quantitative expertise includes:
- Front Office segmentation between the Trading Book and Banking Book.
- Implementation of the FRTB Standardised Approach (FRTB-SA) and Internal Models Approach (FRTB-IMA).
- Development of stress backtesting engines and P&L attribution models.
Solvency II
For insurers, we provide:
- Module-based modeling of the Solvency Capital Requirement (SCR).
- Calculation of MCR, ORSA, and generation of regulatory QRTs.
- Integration of climate and non-financial risks into solvency models.
EMIR
Cogniwave Dynamics supports EMIR compliance (clearing, reporting, risk mitigation) through:
- Connectors with Trade Repositories (TR) for automated reporting.
- Threshold monitoring.
- Documentation of collateral and back-to-back process management.
IFRS 9 / IFRS 17
We assist clients with accounting challenges such as:
- Calculation and modeling of Expected Credit Losses (ECL) under IFRS 9.
- Compliance of information systems with IFRS 17 for insurance.
- Generation of standardized, auditable financial reports.
AML / KYC
We embed AI engines to support:
- Detection of anomalies in client behaviors.
- Risk scoring of clients and countries based on profiles.
- Automation of periodic reviews and sanctions/watchlist checks.
IRRBB (Interest Rate Risk in the Banking Book)
We provide stress testing tools for interest margins and behavioral analysis of deposits to manage:
- Economic value sensitivity (ΔEVE).
- Net interest income variation (ΔNII).
- Generation of EBA regulatory scenarios.
ICAAP / ILAAP
We assist in building and managing the internal risk assessment framework through:
- Development of multi-period projection models (normative and adverse scenarios).
- Integration of stress testing into risk governance.
- Production and documentation of ICAAP/ILAAP reports for supervisors.
Our Specialized Regulatory Services
- Basel III/IV compliance audits and diagnostics
- Deployment of AI-based regulatory engines
- Support for internal model certification (IRB, IMA, IMM)
- Automation of regulatory reporting (COREP, FINREP, AnaCredit, etc.)
- Regulatory monitoring enhanced by NLP/RAG for risk teams
- Predictive dashboards and stress tests powered by machine learning
A Strategic Partner for Complex Regulatory Challenges
Our approach combines regulatory precision, data intelligence, and AI power to transform compliance obligations into strategic performance levers. In a constantly evolving landscape, we help you gain agility, reliability, and efficiency.
Financial risks are at the core of strategic steering for banks, insurers, and investment firms. At Cogniwave Dynamics, we help our clients gain precise and dynamic control over their credit, market, and liquidity risk exposures, while meeting the most stringent regulatory frameworks (Basel III/IV, FRTB, IRRBB, ICAAP, etc.).
Our approach blends quantitative finance, data science, and artificial intelligence to deliver agile, reliable, and interoperable risk management solutions.
Credit Risk
Credit risk remains the primary driver of capital consumption in banking. We support the full credit risk lifecycle—from origination to provisioning, through to regulatory reporting:
- Risk Modeling & Regulatory Calculations
- Development or recalibration of IRB models (PD, LGD, EAD) in line with EBA standards.
- Support for internal model certification (TRIM, ECB reviews).
- Integration of SA-CR and FRTB-DRC standards into internal tools.
- Deployment of dynamic RWA calculators and regulatory impact simulators.
- Stress Testing & Adverse Scenarios
- Design of macro deterioration scenarios.
- Projections of impacts on provisions, RWAs, and capital ratios.
- ICAAP and EBA Stress Test integration.
- Continuous Credit Risk Monitoring
- Automated credit portfolio monitoring with early warning indicators.
- Dynamic PD calculation.
- Behavioral segmentation and anomaly detection via machine learning.
- IFRS 9 & Expected Credit Loss (ECL)
- Automation of ECL calculations.
- Full documentation and traceability of modeling assumptions.
Market Risk
Market risk is now tightly governed by FRTB regulations. We assist in securing end-to-end measurement and management frameworks:
- FRTB-SA and FRTB-IMA Compliance
- Calculation of Sensitivities-Based Approach (SBA) for IR, credit, equity, FX, and commodities.
- Regulatory sensitivities and curve construction (delta, vega, curvature).
- Support for IMA approval: backtesting, P&L attribution, expected shortfall.
- Integrated Exposure Management
- Real-time aggregation across entities and asset classes.
- Intelligent risk limit monitoring (VaR, ES, stress VaR).
- AI-based detection of extreme events (volatility spikes, correlation breaks, illiquidity).
- Advanced Pricing & Analytics
- Hybrid pricing engines using Monte Carlo simulations and neural networks.
- Dynamic visualization of cross-greeks and P&L impact.
Liquidity Risk
Liquidity resilience is a cornerstone of modern prudential management. We implement predictive and robust frameworks for liquidity risk oversight.
- Regulatory Metrics (LCR / NSFR / ALMM)
- Automated LCR/NSFR calculations including behavioral flows.
- ALMM reporting and extended metric production.
- Regulatory cash-flow modeling with product-level granularity.
- Liquidity Stress Testing
- Design of idiosyncratic and systemic scenarios in line with ECB/EBA expectations.
- Projections of funding shortfalls and optimization of liquidity buffers.
- Resilience scoring by entity, currency, and geography.
- Treasury Optimization
- Simulation of marginal liquidity cost and internal FTP models.
- Optimization of balance sheet structure by maturity, currency, and liability type.
- Automated mismatch and structural gap alerts.
AI-Powered Risk Technologies
Our models and platforms are built on:
- Anomaly detection and risk-profile clustering algorithms.
- Simulation engines within secure, scalable architectures.
- Custom visual analytics dashboards.
- Explainable AI (XAI) frameworks for regulatory transparency.
Our Expert Risk Services
- Design/redesign of internal risk management frameworks
- Deployment of modeling, stress testing, and backtesting tools
- Regulatory reporting automation (FRTB, COREP, LCR, NSFR)
- Industrialized IFRS 9/ICAAP/P&L attribution engines
- AI training and enablement for Risk Managers
Enhanced Risk Management through Artificial Intelligence
In a world of rising market volatility, tighter regulations, and increasingly complex models, Cogniwave Dynamics delivers a rigorous, proactive, and tech-driven approach to risk management—where mastering risk also becomes a lever for strategic opportunity.
