Bank of Montreal Partners with TCS for Smooth LIBOR Transition to ARR

Challenge

The Bank of Montreal wanted to convert its LIBOR portfolios to alternative reference rates

The discontinuation of LIBOR rates and their replacement with the overnight alternative reference rates (ARR) due to rate manipulation by the panel banks led to the banking institutions converting the reference rates on the existing financial portfolios from LIBOR to the new ARRs within a strict deadline. Along with maintaining regulatory compliance requirements, the Bank of Montreal had to ensure the functionalities across their banking platform worked as expected with the introduction of ARRs. They needed to fill the resource gap and build a repository of ARRs and regression test cases.

Solution

TCS helped identify test scenarios and deferred payments on LIBOR loans.

The Bank of Montreal, a multinational investment bank, needed a robust solution with a holistic approach to convert their LIBOR portfolios to the new ARRs. TCS helped BMO identify test scenarios by creating a comprehensive data set of over 500 test cases. By developing over 200 test cases on the new functionalities of the ARR, TCS helped the client ensure compliance with new regulations, understand the impact across the industry, and meet the targeted deadline for regulatory requirements through effective resource management. TCS also helped BMO understand the impact of payment deferral on LIBOR loans due to the COVID-19 pandemic. TCS eventually helped the client convert the reference rates on their existing portfolio to the new ARRs within the 2021 year-end deadline

"TCS was instrumental in helping BMO establish Alternative Risks Rate (ARR) functionality assisting in identifying test scenarios, creating test cases for new functionality, and executing the successful test plan." -Brian J. Swayne, Head Corporate Commercial Banking Operations (CCBO) Project Delivery, BMO Financial Group

Benefits

Transitioning loan payment deferral platforms from LIBOR to ARR with test cases.

TCS helped the Bank of Montreal convert the reference rates on their existing LIBOR financial portfolios to the new ARRs. By developing a comprehensive database of test cases and training content, TCS helped BOM implement a defect management process.

TCS solution provided the following benefits to the Bank of Montreal:

Early identification of defects by 2% on the Loan IQ platform
Expansion of knowledge repository with a database of test cases and training content
Expedition of the compliance process in line with ARR regulations
Tracking, monitoring, and maintaining visibility of issues to remediation
Business strategy identification and planning the next steps via key data analytics
Expedition of UAT regression test case preparation with timely solutions
Improved customer service capability with transition of internal process

What Made it happen

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Risk and Compliance functions are looking to drive intelligent interventions in information and control assurance as higher probability of risk demands enhanced controls for effective risk and compliance management. The TCS solution caters to the BFSI industry enabling compliance, driving automation and optimization of costs.

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The economic uncertainty resulting from the COVID-19 crisis has made it imperative for banks to relook at their counterparty risk management practices. With TCS’ Early Warning Framework, banks can assess the riskiness of counterparties in near real time.

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Bank of Montreal Converts its LIBOR Portfolios

Challenge

The Bank of Montreal wanted to convert its LIBOR portfolios to alternative reference rates

Solution

TCS helped identify test scenarios and deferred payments on LIBOR loans.

Benefits

Transitioning loan payment deferral platforms from LIBOR to ARR with test cases.

What Made it happen

Customer experience management suite

Cognitive assurance for risk and compliance

Early warning framework for risk management

Transformation starts here

Find out more

Where adaptability meets advantage

We deliver excellence and create value for customers and communities.

Discover why customers choose TCS

Upcoming events

Recent recognitions

Want to be a global change-maker? Join our team.

Find the latest news about TCS

Recent News

Global knowledge. Local support

Challenge

The Bank of Montreal wanted to convert its LIBOR portfolios to alternative reference rates

Solution

TCS helped identify test scenarios and deferred payments on LIBOR loans.

Benefits

Transitioning loan payment deferral platforms from LIBOR to ARR with test cases.

What Made it happen

Customer experience management suite

Cognitive assurance for risk and compliance

Early warning framework for risk management

Related reading

Transformation starts here

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