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How BDO helped Calvert Home Mortgage implement IFRS 9―and improve operations

Case study

Alberta-based Calvert Home Mortgage Investment Corporation is a leading private mortgage lender founded over 40 years ago with the mission to provide fast, flexible, and value-based lending options to mortgage brokers, homeowners, and real-estate investors in the Canadian market.

Over 40 years, the definition of "fast, flexible, and value based" has radically changed.

Tomorrow, today: advanced analytics that drive data-driven business decisions

“Day after day, we hear about automation, about analytics, about data in the media—ultimately, it's about how fast you can move, how fast you can make decisions. In an industry like secured lending, it can be difficult to accomplish business objectives and meet compliance requirements while moving fast enough to serve your market. A siloed approach to analytics and predictive models can lead to outcomes that are difficult if not impossible to audit. Integration and collaboration across our service lines—Technology Consulting to Assurance & Accounting Services―allowed for the best outcome for Calvert Home Mortgage. Rather than compromising clients by offering a point solution such as stand-alone analytics, we can help make companies more efficient and effective, allowing them to make better decisions”, says Michael Hiley, who leads BDO's Alberta Technology and Life Science Practice from the Calgary office.

Working with BDO, implementation of a new accounting standard, IFRS 9, became an opportunity for Calvert Home Mortgage to improve operations.

Dean Koeller, President of Calvert Home Mortgage notes, “In early discussions with Graham [Marjoribanks, a partner in BDO's Audit and Assurance Practice] about our business and new IFRS 9 requirements, Graham encouraged me to think more broadly than just about the accounting issue―he focused us on how we could solve some challenges our business was facing. His more holistic approach set the stage for what we have accomplished over the last year. Our conversation grew to include how we investigate our business, our numbers, and our process in a more comprehensive way, to determine how Calvert Home Mortgage can strategize for continued growth. My internal conversation with my team began with the question, ‘if we double our business, will the processes and system we have now continue to operate effectively?'”

Spreadsheets can be a liability when calculating assets: the impact of IFRS 9 on processes and systems

Under IFRS 9, financial institutions are required to change the way they recognize, classify, and measure financial instruments.

To effectively meet IFRS 9 compliance requirements, organizations need to develop a strategy to gain reliable and accurate insights into loan origination and servicing―moving from an incurred-loss framework to an expected-credit-loss (ECL) model.

“That's a difficult calculation”, Michael notes, “and many organizations try to do it with a spreadsheet.”

Leveraging technology—and integrated teams

Calvert Home Mortgage engaged BDO to conduct a data-and-technology assessment focused on data sources, technology systems, and regulatory requirements under IFRS 9.

Dean says, “This led us to conduct a full evaluation of our accounting systems and methodologies for reducing data entry and centralizing our data to simplify our systems. Prashant [Gupta, BDO's AI and Analytics Practice Lead―Western Canada] and Rahul [Singh, Senior Data Scientist and Analytics Technology Lead―Western Canada with BDO Consulting] were introduced to us, to provide the technical expertise in organizing, gathering, and utilizing our data in a better way. What my entire team experienced were two individuals who deeply cared about us and about understanding our challenges and what we were looking to achieve. They helped us think through our information and data challenges, and proposed solutions that would allow us to leverage and grow our company. The BDO team took the time to understand our business―they demonstrated real interest and cared about being helpful with what problems we needed to solve. In our office, we strive to create an effortless experience for our clients, and it was clear that the BDO team shared that same value―they made us comfortable exploring a technology solution that was outside our knowledge base and technical expertise.”

Rahul details the process:

“Our work, Calvert's analytics-driven digital transformation, is highly determined by Calvert's business model and their features. After talking to Calvert, we took a step-by-step and agile approach to transform their business. We first connected their mortgage database to Power BI and collaborated to clean their data. We spent quite a bit of time on understanding their business and how we can improve their key-performance-indicators (KPI) and reporting. Next, we created over 250 automated formulas and five critical reports that Calvert Home Mortgage needs to efficiently run their business and provide value to their clients. Once all the reporting requirements were met, we created a machine-learning-driven predictive model to predict expected credit losses, fulfilling the requirements of IFRS 9.”

BDO's data-and-technology assessment resulted in a strategy to implement a loan-classification-driven predictive model leveraging Machine Learning (ML) algorithms.

The solution used:

  • Modern data warehousing for the data platform
  • Power BI, a business-intelligence platform, for advanced visualization
  • ML for predictive models


  • Used supervised ML algorithms to implement a model to predict ‘ECL as a continuous variable';
  • Provided Calvert Home Mortgage managers with the ability to maintain correct reserves, as a result of new understanding of data sources and advanced-analytics capabilities

Of the impact of Calvert Home Mortgages' collaboration with BDO, Dean says, “I have been running my business using a flashlight to see where I am going. This solution will allow me to turn on the lights in my business, so I can better see and understand what is happening in real time. That is a powerful tool.”

The future view: delivering on a 40-year mission

“Calvert Home Mortgage now has the infrastructure to run a leaner, quicker mortgage-investment corporation—and the potential to overhaul operations through automation,” Michael notes.

Adds Dean, “The work the BDO team has done saved our company 182 hours per year in administrative, accounting, and internal-audit work. More importantly, the platform will allow our company to be much more efficient, provide better insight, and take the next step in the growth of our business. It has also opened our eyes to the value of aggregating our data to provide a higher level of insight into not only what we are doing, but how we are doing, and where there may be further opportunity to make our business better in the future. I am excited about the opportunity not only to aggregate our portfolio-management database, but also to integrate it with our customer-relationship-management (CRM) data, accounting, and financial data to bring a higher level of transparency and decision-making to our business. I could not have made this leap without the expertise of the BDO team.”

Great business partners―BDO's integrated approach

The BDO team's integrated approach helped Calvert Home Mortgage implement IFRS 9—and deliver on their mission to provide fast, flexible, and value-based lending options. Now. And, in the future―using a model that could change how the mortgage-investment company operates.

The model also reflects how BDO operates:

“If you had asked me two years ago how I felt about BDO, I would have said ‘great accountants and auditors.' Now, I would say they are great business partners who are interested in the success of my business”, Dean concludes.

Contact us to learn how we can partner in the success of your business.

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