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Friday Dec 25 - 2020
Please read on to understand the role of Actuaries in Banking By our very smart Intern Mr Mayank Gupta.
Actuaries are qualified to help with quantitative analysis of risk including building models, setting assumptions and then monitoring and updating them. Traditionally, actuaries work in life insurance, general insurance, pensions, investments, and employee benefits.
Nowadays, banking seems like an ideal industry for actuaries to be able to help. Earlier banks used IAS 39: Financial Instruments: Recognition and Measurement which is an international accounting standard for financial instruments. It was replaced by International Financial Reporting Standard 9 (IFRS 9), which becomes effective from Jan 2018. As a result, banks have to shift from the incurred loss model to the expected loss model. Today, the Indian banking scenario is such that they hardly have any professional who does possess modeling skills to the extent required to cope up today with the changes taking place.
Here comes an opportunity for the Actuarial profession to fill the void.
Thus banking has emerged as a new sector for actuaries to work in.
Just to inform you Actuaries have been actively involved in Banks in Africa, Australia, and a few other countries for many years.
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