How the EBA’s New RTS Makes Economic Dependencies a Regulatory Priority

In the world of credit risk, it’s no longer enough to look at clients in isolation. Sometimes, what connects your borrowers behind the scenes - a contract, a payment, a supply chain - could be the very thing that brings them down together.

The European Banking Authority (EBA) has now made this connection official. In its recently published Regulatory Technical Standards (RTS) on the identification of a Group of Connected Clients (GCC) under the CRR (Capital Requirements Regulation), it outlines when two or more clients must be treated as a single risk due to economic interdependence, not just ownership or control.

While there are seven such scenarios listed, this article focuses on three key indicators you’re likely to see in everyday credit portfolios and why they can no longer be ignored.

1. Revenue/Expenditure Dependency

Where a significant part of a client’s gross receipts or expenditures comes from another client - and the relationship cannot be easily replaced.

Real-world example:

A small logistics company derives 75% of its annual revenue from a contract with a large e-commerce retailer, who also happens to be a client of the same lender. If the retailer changes providers or fails to renew the contract, the logistics firm’s revenue and loan servicing abilitycould be severely impacted.

Despite being independent entities, this level of dependency means that both clients may need to be treated as a single risk, especially if the logistics company would struggle to replace that customer.

The main challenge here is that this type of dependency often remains hidden unless lenders have access to cashflow data, client contracts, or payment concentrations ofinsights that standard credit scoring tools rarely uncover.

2. Output Dependency

Where a significant part of a client’s production/output is sold to another client of the institution, and that production cannot easily be sold to others.

Real-world example:
A local food manufacturer sells 70% of its goods to a regional supermarket chain also a client of the bank. If the supermarket ends the contract, the manufacturer has no alternative buyers in place.

This kind of B2B dependency is common in trade finance, leasing, or supply chain lending. The EBA requires institutions to assess whether output is diversified, and if not, whether clients should be grouped.

Here the key challenge is that without detailed knowledge of a company’s sales distribution and transactions, this dependency can go undetected - especially in SME portfolios.

3. Receivables or Liabilities Dependency

Where a significant part of a client’s receivables or liabilities is to another client of the institution.

Real-world example:
Two small businesses have an informal loan agreement or a rolling trade credit relationship. If one faces distress and cannot pay, the other’s liquidity is immediately at risk.This is particularly relevant in intragroup financing, related-party trade, or cases where firms have recurring financial exposure to each other.

The biggest challenge is that receivables and liabilities data are often buried in invoices, financial statements, or bank transactions- making manual detection nearly impossible at scale.

Why This Is Now a Compliance Priority

The EBA’s final RTS clearly states: Economic interdependence alone is enough to create a group of connected clients - even in the absence of legal control. That’s a significant change. It means that institutions are now expected to:

- Investigate dependencies beyond legal ownership

- Define internal thresholds for what counts as "significant"

- Use judgement when applying these indicators

- Document and justify grouping (or not grouping) decisions

Failure to do so could result in:

- Undetected concentration risks

- Underestimated exposure across client portfolios

- Regulatory findings in audits and supervisory reviews

How Prestatech Makes Detection Scalable

At Prestatech, we transform raw bank statement data into structured, machine-readable insights, helping lenders detect hidden economic dependencies automatically and at scale.

Here’s how our technology supports the identification of interdependent clients as described by the EBA:

1. Transaction & Income Mapping
We analyze transactional data across bank statements to:

- Identifymain income sources and spending patterns

- Detect recurring counterparties and payment relationships

- Highlight potential vendor–customer or partner dependencies

2. Cashflow Concentration Detection
By analyzing bank statement transactions, we detect when a client’s cash inflows or outflows are heavily linked to a specific counterparty. This helps surface hidden receivable or liability dependencies, such as reliance on a single customer, supplier, or financing source.

3. Intelligent Risk Flagging
We automatically flag potential economic interconnections by:

- Ranking top counterparties by frequency and value

- Identifyingshared payment networks or recurring transactions

- Providing data-backed alerts for further risk review

With this insight directly extracted from bank statements, your risk and compliance teams can move from assumptions to evidence-based decisions, fully aligned with the EBA’s new expectations.

Final Takeaway

These aren’t theoretical risks anymore. The EBA has made it clear:

If your clients are economically tied together and the distress of one could cause another to default, you must treat them as a single risk. What was once buried in bank statements or contract footnotes is now at the center of regulatory scrutiny. With the right data tools, you can not only meet the EBA’s expectations, you can also spot concentration risks before they become losses.