How to Streamline CCAR Compliance with Pentaho

The Comprehensive Capital Analysis and Review (CCAR) has become a regulatory backbone for the largest financial institutions in the U.S. Surveilled by the Federal Reserve. CCAR compliance helps banks maintain the necessary capital to weather economic surprises. This mandate puts an immeasurable burden on banks to consolidate, evaluate, and report risk exposure across multiple business lines and entities.

Complying with CCAR requires extensive stress testing, risk consolidation, and report writing — which is a nightmare in an industry plagued by disparate data sources, manual processes, and inconsistent data quality.

The regulatory burden is further exacerbated by the fact that CCAR reporting must also be a part of industry-best practices platforms such as AxiomSL and Wolters Kluwer. These platforms aid in final reporting and regulatory submissions but depend on upstream workflows to provide complete, timely data.

We’ll explore the unique complexities for financial institutions to be CCAR compliant, and the value of a central platform for data integration, governance, automation, and auditing in meeting these challenges.

The CCAR Compliance Challenge

CCAR compliance requires financial institutions to calculate, aggregate, and report risk exposures during tough economic times. Banks are required to submit large documents to the Federal Reserve to prove their capital sufficiency, which is a very heavy ask of data teams, compliance staff, and senior management. There are five major challenges financial institutions face with CCAR.

1. Broken Data Warehouses – One of the most complex challenges is bringing together risk data across multiple disconnected systems like banks, risk engines, warehouses, and operating systems. Every system can contain data in an alternate format, making it exceedingly difficult to homogenize and normalize for CCAR stress testing. Example: market risk, credit risk, and operational risk information often reside in different systems, making it hard to build a single risk exposure report. 
2. Lack of End-to-End Data Lineage – CCAR mandates that banks prove end-to-end data lineage for each input, transformation and output used in stress testing. This is crucial for data visibility, traceability and auditability. Lacking identifiable lineage, regulators could doubt the veracity of a bank’s stress test reports. Example: An international bank was fined $250M by the OCC for a lack of data traceability, which could have been addressed with better lineage tracking and auditability. 
3. Manual Operations and Wasteful Workflows – Banks often still use manual procedures like spreadsheet reconciliations or hand-picking risks, introducing human error, reporting delays and eroded system performance. Example: a regional bank was forced to push back its reporting deadline due to manual errors in combining stress test results from different departments. 
4. Data Quality and Consistency – Inconsistent data can lead to incorrect stress test estimates, resulting in regulatory violations for CCAR reports that are deficient for duplicates, missing information, and calculation errors. Example: an American bank lost its CCAR filing due to incorrect credit risk information wrongly aggregated from multiple risk engines. 
5. Regulatory Audit and Transparency Standards – Auditors and regulators ask banks to provide evidence of where the data came from, how it was processed, and whether it was subjected to stress tests. Example: absent audit trails and metadata increase the risk of regulatory scrutiny.

How Pentaho Helps with CCAR Compliance

Pentaho solves the biggest CCAR compliance problems by providing a single platform for data integration, lineage, and governance. It empowers banks to automate and streamline risk aggregation while being transparent, traceable, and audit-ready. Together with AxiomSL and Wolters Kluwer, Pentaho is a great engine for correct, automated, and timely reporting in five key areas: Data Integration and Risk Aggregation, Data Lineage and Auditability, Data Quality and Golden Source, Automation and Workflow Orchestration, and Integration with AxiomSL and Wolters Kluwer.

Pentaho’s Extract, Transform, and Load (ETL) engine pulls data from disparate source systems, automates the translation into a standardized format, and loads it into a central repository that’s easily re-imported into AxiomSL and Wolder Kluwer, helping meet CCAR’s need to integrate risk exposure across systems and sources.

Pentaho Data Catalog (PDC) provides end-to-end data lineage, allowing banks to track raw data pipelines from origin to output to CCAR reports. This is essential for auditing and reporting so regulators can track the path of each data point in the stress test calculation.

Pentaho’s platform allows you to define a “golden source” – a single approved source of risk data. By centralizing this repository, banks can achieve the data consistency, integrity, quality, and completeness necessary for stress testing and CCAR reporting. It also eliminates manual labor by generating entirely automated stress test data collection and delivery workflows, helping banks avoid manual work for CCAR reconciliations. Real-time notifications inform users of automation process breakdowns to avoid reporting gaps.

And finally, Pentaho delivers consolidated, unadulterated data for regulatory submission to AxiomSL and Wolters Kluwer.

Overcoming the CCAR Challenge

The challenges of CCAR compliance are significant, but they are not insurmountable. With regulators prioritizing data governance, automation, and auditability, Pentaho is not just a “nice-to-have” platform—it’s an operational necessity.

By using Pentaho as a foundational platform for data integration, lineage, and quality, banks can overcome fragmented data silos, improve traceability, and enable seamless submissions to AxiomSL and Wolters Kluwer. Pentaho automates the entire risk aggregation process, ensuring banks remain audit-ready, reduce errors, and avoid costly regulatory fines.