Energy Credit Best Practices – Chapter: Information Technology http://ccro.org © Copyright 2022, CCRO. All rights reserved. 13 2.1.2 Credit Risk Committee Duties/Oversight of the Credit IT Design As discussed in the earlier chapter on Governance, the Credit Risk Committee (CRC) provides an internal management vehicle for support and oversight of the Credit Risk Strategy. The Standard Operating Procedure for the CRC should include advisory and support for the development of the Credit Risk Strategy and implementation of the associated Credit IT design. In those duties, the CRC may be informed by applicable industry frameworks and models, as discussed here in the chapter on Governance. Recommendation 3: The Credit Risk Committee provides active support and advisory for implementation of the Credit IT Design. 2.2 Designing the Credit Information Ecosystem Now more than ever, it is critical for every organization to have an integrated data strategy to ensure the Security and Integrity of the credit-related process. Many times, these Systems will be bespoke and be in separate functions or procedures across the organization. Tying these Systems together to integrate the required data digitally is the aim of this section of the paper. This strategy may be part of a credit organization’s data management plan or simply part of its overall technology design. Now more than ever, it is critical for every organization to have a data integration strategy on how to ensure data is securely shared with internal and external stakeholders. This strategic vision for Credit may be part of a credit organization’s data management plan or simply part of its overall technology design. For an energy firm to ensure this successful implementation strategy, especially when managing Liquidity Risk, it requires close coordination between the front, middle, and back-office. This coordination becomes especially important when making decisions impacting credit-related processes properly vetted across groups. o Select the elements (e.g., people, Information System s, risk metrics, etc.) that are most appropriate for both the organization’s Risk Appetite and credit portfolio o Implement predictive Key Performance Indicators (KPIs) and Key Risk Indicators (KRIs) to act when an element is not performing as intended proactively and The actual credit Information Systems used by different organizations vary for several reasons, including differences in business objectives and the markets in which a company transacts. An exercise should be undertaken across the organization’s different teams to discuss the credit department's primary function(s) and document what requirements and capabilities are necessary to ensure this department’s success. For example, the Credit Appetite, functions, and processes will look quite different for a firm primarily engaged in Asset-Backed Trading, vs. a Regulated or Public Utility, vs. an Investment Bank, vs. an Independent System Operator (ISO). STEP 1: Identify the Credit Group’s primary roles and responsibilities STEP 2: Identify all stakeholders involved in the Credit Information Ecosystem, and their respective roles and responsibilities STEP 3: Map existing credit-related processes and Systems, including the flow of data and