Banking and Financial Solutions

In today's financial markets, banks & financial institutions in their operations face different types of risk challenges that will affect the institutions in running their business normally. Since the global crisis, banks are prone to risk. The kind of risk banks are facing are credit risk, market risk, operational risk, liquidity risk, dilution risk, country risk & business risk to name a few. Risk and Returns are core pillars of Financial System and Banking Industry.

Innowids enables banking and financial services institutions with Risk, Fraud, Compliance and Reporting embedded analytics using Integrated application. Thereby providing a single solution that helps financial institutions grow, manage risk, and meet risk-adjusted performance objectives with minimal effort in terms of cost and time.

Innowids helps in implementing below Analytical Solutions:

  • Oracle Financial Services Advanced Analytical Applications (OFSAAA)
  • Moody’s Analytics
  • Lombard Risk Solutions
  • SAS Solutions
  • Small Business Automations

IFRS Forecasting

During the financial crisis, the delayed recognition of credit losses on loans (and other financial instruments) was identified as a weakness in existing accounting standards. Most major capital markets are now actively discussing or pursuing efforts of convergence towards single sets of globally accepted accounting and auditing standards. One direct financial consequence of the regulation for banks is lower operating margin and profitability, stemming from higher provisioning required, as well as impact on a bank’s capital, liquidity and leverage. Banks face pressure on net interest margins on a risk adjusted basis.

The practical challenges faced by Financial Institution in adopting IFRS:

  • Significant increase in credit risk
  • Observation period for modified accounts
  • Estimation of expected cash flows for undrawn portion
  • Effective maturity for Revolving Lines of Credit (deliberation in progress)

IFRS solution provides a framework for making the calculations needed to ensure compliance with the standard. The solution is designed to take data from a staging area that is common across all Analytical Applications installations and enable its reuse for analytical needs. The solution also provides for prebuilt rules and workflows for stage assessment. These rules are based on commonly based assessment criteria such as rating migration, days-past-due migration, industry classification and migration. Additionally, the solution allows users to configure additional rules based on their own models for stage assessment. A complete set of financial statements includes a statement of financial position, a statement of comprehensive income, a statement of cash flows, a statement of changes in equity, a summary of accounting policies, and explanatory notes.

Scenario Analysis

  • Comprehensive stress testing capability that enables loss forecasts under stress conditions
  • Flexible shock definition & scenario management which allows assessment under multiple shocks values to be specified on the same set risk variables
  • Enterprise-wide stress testing capability which allows institutions to design stress scenarios catering to a wide variety of risk events and covering multiple risk areas

As a consulting organization, Innowids consultants have strong domain expertise providing full life cycle implementation. We have experienced consultants in consulting Analytical Application and Integration services. Innowids consultants come from the Industry experience and are highly experienced in integrating the Reporting standard using IFRS. Innowids can help Financial Institutions in reducing data redundancy, credit risk and meet their challenges.

Enterprise Asset Liability Management

ALM process mechanism help manage the mismatch between assets and liabilities held in a central environment. It is these mismatches, which imply the risks (Interest Rate, Liquidity & Currency/Translation) that need to be managed in a central environment. These risks are usually created by the individual business lines. ALM is the financial risk management area for any financial institution. This includes risk assessments in all the dimensions like structuring of the bank’s repricing and maturity schedules.

Asset Liability Management (ALM) helps financial services institutions measure and monitor interest rate risk, liquidity risk, and foreign currency risk. This solution measures and models every loan, deposit, investment, and portfolio individually, using both deterministic and stochastic methods. Oracle Financial Services ALM is a next-generation solution fully integrated with Oracle’s Financial Services Analytical Applications and shares a common account level relational data model.

ALM also provides the high-end analytics necessary to meet all your risk management goals, including value-at-risk (VaR), earnings-at-risk (EaR), market value, duration/convexity, income simulation, liquidity and interest rate gap. You control the levels at which results are aggregated, both in terms of the time frequency (modelling buckets) and the product categorization.

Enterprise Risk Management

Enterprise risk management solutions span all areas of risk, including credit, market, operational, liquidity, fixed asset, business and reputation risk, enabling institutions to manage all their risk and provide necessary feeds for compliance-based reporting. The capabilities of Oracle Financial Services for risk management help financial institutions address compliance issues such as Basel II that demand a close operational synergy between finance and risk functions.

Oracle Financial Services Market Risk Measurement and Management enables institutions to estimate the risk for multiple, user-defined portfolios. Portfolios are defined based on a combination of one or more dimensions such as counterparty, line of business, legal entity, asset class and instrument type, that enable risk assessment at any required level of granularity in the organization. This provides institutions with a holistic view of risk on their trading book and enables them to regulate risk at the level of each dimension; thereby developing effective risk management strategies.

Financial institutions are now required to perform a battery of calculations, scenario analysis and stress tests. As part of OFSAA’s Basel III, banks can better manage their liquidity profiles whilst simultaneously report the liquidity regulatory ratios, LCR and NSFR, under a range of stress scenarios and assess the impact and take remedial action instantaneously. Financial institutions can leverage the comprehensive solution to cover all other facets of Basel III, including quality of capital, countercyclical and conservation buffers, enterprise stress testing, additional treatment for counterparty credit risk and model risk management. OFSAA provides a unified, enterprise-wide, multi-jurisdictional Basel III solution, which ensures that all facets of any computational process are completely transparent, thus giving greater insight and comfort to both internal and external stakeholders

The robust reporting process allows financial institutions to:

  • Report on a cross-entity basis; e.g. solo and consolidated
  • Create reporting in multiple languages and to export to a variety of tools based on investor requirements
  • Exhaust pre-configured reports and dashboards covering all aspects of liquidity risk management
  • Leverage a Unified, Transparent and Flexible Analytical Platform.

Enterprise Performance Management

Now more than ever, financial institutions, their regulators, and shareholders are focused on the need to measure and meet risk¬ adjusted performance objectives, price products to reflect their true risk, and better understand how their institutions are impacted by threats to liquidity, capital adequacy, and exposure to market rate volatility. OFSAA EPM helps financial organizations in managing their enterprise shareholder objectives by integrating performance and risk applications into a single framework. A complete solution for Performance Management, Oracle Financial Services Analytical Applications for EPM include:

 

Oracle Financial Services Profitability Management:

Enables financial institutions to calculate profitability information by products, channels, segments, and individual customer relationships on a risk adjusted basis.

Oracle Financial Services Funds Transfer Pricing:

This is a matched maturity funds transfer pricing application, enabling financial institutions to determine the spread earned on assets and liabilities, and the spread earned as a result of interest rate exposure for each and every customer relationship. This enables accurate assessment of profitability for every customer, as well as along product channel, and business lines. The Funds Transfer Pricing module centralizes interest rate risk, where it can be effectively understood and managed.

Oracle Financial Services Pricing Management, Transfer Pricing Component:

Provides real-time transfer rates to support pricing loan transactions, reflecting immediate market conditions. Its risk based pricing methodologies use the transfer pricing methodology and prepayment assumptions found in Oracle Financial Services Transfer Pricing.

Oracle Financial Services Profitability Analytics:

To help financial services organizations achieve their profitability goals, Oracle Financial Services Applications and Oracle Business Intelligence Enterprise Edition (OBIEE) have been integrated into an industry ¬leading profitability business intelligence application: Oracle Financial Services Profitability Analytics. The combination of these two market leading solutions provides financial services organizations with a turnkey solution for profitability analytics delivered using Oracle's industry ¬leading business intelligence platform.

Oracle Financial Services Balance Sheet Planning:

Helps banks more accurately forecast and plan net interest margin using Asset Liability model type capabilities in a planning framework. All the while, leveraging the underlying strength of the Hyperion Planning solution, including OLAP and user interface.

Enterprise Financial Crime and
Compliance Management
(Operational Risk)

OFSAA Operational Risk and Compliance Management solution helps organizations manage operational risk and streamline regulatory compliance. It provides banks and other financial institutions with a comprehensive tool to meet all operational risk needs of identifying and reducing unnecessary losses across multiple lines of business.

Oracle financial services operational risk solution provides banks and other financial institutions with a comprehensive tool to meet all operational risk needs of identifying and reducing unnecessary losses across multiple lines of business.

OFSAA Operational Risk and Compliance Management solution helps organizations manage operational risk and streamline regulatory compliance. It provides banks and other financial institutions with a comprehensive tool to meet all operational risk needs of identifying and reducing unnecessary losses across multiple lines of business.

Oracle financial services operational risk solution provides banks and other financial institutions with a comprehensive tool to meet all operational risk needs of identifying and reducing unnecessary losses across multiple lines of business.

 

Key features:

  • Central libraries for risks, controls, key indicators and compliance for data integrity and consistency
  • Single data repository for risks, controls, compliance obligations and events across multiple jurisdictions and lines of business
  • Comprehensive linkage capability between all the various entities offering a 360-degree view
  • Risk events and loss collection tracking
  • Linkage of insurance policies to risks, controls, and claims against losses
  • Powerful workflow engine to keep users informed
  • Wide spread set of dashboards and reports

OFSAA Operational Risk enables financial entities achieve the goals in the following ways:

  • Promote a Risk Aware Culture throughout the Organization
  • Provide Insight across the Enterprise
  • Establish a Centralized View to Improve Efficiency
  • Realize an institution’s GRC and Business Objectives