Stress testing is a key part of ALM, ILAAP, and ICAAP. But for many banks, it’s still manual, slow, and disconnected from everyday decision-making. In this article, we break down how ALM teams can simplify stress testing, build resilience, and turn regulatory work into strategic insight.
The usual pain points
Let’s be honest. Most stress testing processes are:
- Time-consuming and spreadsheet-heavy
- Hard to adapt when scenarios change
- Disconnected from business and Treasury decisions
- Built to meet regulatory deadlines—not drive insights
You spend weeks pulling the data together, only to run a single scenario. And when the CFO wants a variation, you’re back at square one.
Stress testing should be a decision-making tool—not just a compliance task
Done right, stress testing helps ALM teams:
- Identify weaknesses in interest rate, liquidity, or capital positions
- Simulate forward-looking ILAAP and ICAAP scenarios
- Model the impact of market events or business strategy shifts
- Support informed decision-making at ALCO and board level
It’s not just about surviving a shock. It’s about seeing it coming and responding with confidence.
What smart stress testing looks like
To deliver real value, ALM teams need a stress testing framework that is:
- Fast: Create and run scenarios in near-time with results instantly available
- Flexible: Combine regulatory and internal scenarios
- Transparent: No black-box logic—understand your assumptions, understand your results
- Connected: Link liquidity, earnings, capital, and IRRBB in one model
That’s how stress testing becomes a business asset—not just a report.
How MORS helps
At MORS, we know that stress testing is central to modern ALM. Our platform allows you to:
- Simulate regulatory (e.g. ECB, PRA) and internal scenarios
- Run what-if analysis across the full balance sheet
- Link liquidity risk and IRRBB
- Create ALCO-ready outputs with full auditability
All in one place. No data wrangling, no rework, no black box.
Stress testing isn’t going away.
Make it work for you.
The future of ALM isn’t reactive. It’s proactive. With the right tools, stress testing becomes your edge:
- More strategic
- More insightful
- Less stressful
Ready to run stress testing without the Excel panic? Book a 60-min walkthrough.