Case Study

Basel III Endgame

This case study is a continuation of an earlier case study. We will publish updated versions as the project continues to evolve.

Basel III Endgame (B3E) has emerged as a pivotal moment in the global financial landscape, presenting a transformative challenge for banks worldwide. In this case study, we explore the initiatives undertaken by Arrayo in collaboration with a leading Japanese international financial institution investment banking entity in the United States, for B3E implementation. With the proposed transition period beginning in July 2025, our client is actively navigating the complexities of B3E implementation across various risk metrics, with the Arrayo team playing a crucial role in shaping the ongoing transformation.
B3E, unveiled through the Notice for Proposed Rulemaking (NPR) for the Fundamental Review of the Trading Book (FRTB) and Basel III Finalization, marks a radical shift in US risk-based capital standards. The NPR was published on July 27, 2023, by key regulatory bodies, including the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC).
B3E is a significant regulatory capital overhaul that will have far-reaching implications for the banks’ capital management, business strategy, and operations.


With the B3E phased-in transition period beginning July 1, 2025, with full compliance starting on July 1, 2028, our client is actively addressing the multifaceted challenges posed by B3E regulatory requirements. This includes ongoing efforts to understand the ever-evolving regulatory landscape/changes, assessing their impact on Risk and Operations Management, addressing the new regulatory data, controls and technology requirements, realigning.


Arrayo, in close partnership with our client’s Risk organization, is actively engaged in an ongoing comprehensive approach to B3E compliance and transformation. The key pillars of our strategy include:

  • Regulatory Gap Analysis: Our team is actively involved in monitoring and interpreting ongoing regulatory changes, ensuring that the bank is well-informed and agile in adapting to the evolving regulatory requirements.
  • Technology Modernization: Recognizing B3E as an opportunity to modernize capital infrastructure, our ongoing efforts involve continuous updates to the bank’s technological landscape by streamlining and further automating processes, enhancing their agility and scalability, addressing inefficiencies and manual processes to reduce operating costs and man-hours.
  • Strategic Execution: The central focus of our efforts lies in orchestrating the seamless transition to a dynamic and compliant operational framework. This includes continuous development and refinement of business and functional requirements, improving/implementing data quality framework and controls in line with regulatory needs, implementing regulatory data standards, iterative creation of analytical dashboards and reporting tools, and dynamic adjustments to workflows to ensure alignment with regulatory changes.
  • Solution Build: Our team is actively engaged with Risk and Technology partners in the setup and implementation of the overall solution build for Market Risk capital calculation across the bank’s legal entities that have trading exposures.
  • Integrated Platform for Risk Review & Reporting: Our team is engaged in active dialogue with the Technology partners for the design and implementation of a consolidated and integrated platform for Risk reporting across various risk stripes, to streamline the process of risk review, and investigations and produce auditable workflows for traceability.
  • Process Improvement: We lead and actively participate in ongoing business and IT improvement of new products, services, and processes through incremental and breakthrough improvements.


While the project is ongoing, the achieved milestones and deliverables include:

  • Dynamic Project Plan: Documentation of a strategic Project Road Map and Project Plan outlining key milestones, tasks, and timelines, ensuring that the project remains on track for timely compliance with regulatory deadlines.
  • Target Operating Model (TOM): Development of an end-to-end Target Operating Model and Roles and Responsibilities matrix across the Bank’s First and Second Line of Defense, providing a clear vision of the bank’s future state organization, to serve the ever-evolving regulatory needs.
  • NPR Review and Gap Analysis: Documentation of gap analysis and related business requirements based on new regulatory changes, for local legal entity level reporting.
  • Business and Functional Requirements: Elicitation, documentation, and ongoing refinement of comprehensive business and functional requirements for technology implementation as it relates to data sourcing, capital calculation, and risk reporting platform build.
  • Data Quality Controls: Design and documentation of new/update of existing data quality checks, process, and controls requirements, in line with regulatory expectations.
  • Process Flow Documentation: Documentation of end-to-end current and target state process flows and use case diagrams from System of Records through calculation and downstream reporting, including key functional groups involved in the process.
  • Platform Testing: Documentation of comprehensive testing plans and testing artifacts in support of the platform testing and implementation as it relates to the B3E implementation.
  • Iterative Workflow Designs: Ongoing creation and refinement of workflows ensure that business processes are automated to the maximum extent, aligned with regulatory demands, and fully support operational efficiency.
  • Status Reporting: Ongoing status reporting to the Program Sponsor and key stakeholders on the program progress, and key risks, issues, and dependencies to be addressed in a timely manner.
  • Documentation: Documentation of various project artifacts including project plans, status reporting materials, RAID logs, all business-related documentation on Confluence including process, requirements, ad-hoc dashboards to report implementation status, and other materials and artifacts related to the program implementation.

B3E presents an ongoing challenge that requires adaptability and continuous effort. Through agility, adaptability, and collaborative efforts, Arrayo and the bank are actively turning this challenge into an opportunity for transformation, setting the stage for sustained success in an evolving financial landscape.