products

risk and capital management solutions

Effective risk and capital management enables your institution to increase share­holder value by identifying and reallocating capital to areas of the business that have high strategic value and sustainable returns, or that have long-term growth and profitability potential.

Financial Studio’s risk and capital management solution comes with an extensive range of functionality to address the requirements of Basel II and III, RAROC, and other risk-related performance measurement ratios, and

  • provides a totally integrated risk and capital management solution,
  • delivers comprehensive support for enterprise-wide credit, market, and operational risk management,
  • ensures compliance with external regulations,
  • allows your institution to maximise the investments made to meet the immediate short term requirements,
  • builds a comprehensive capital framework and enterprise risk management platform with superior internal controls.

The available working capital of an enterprise will have a significant effect on its business. Organisations with the flexibility to calculate capital usage accurately at different levels and apply different methods will gain the largest returns on their investment and be the market leaders.

Basel II and III Requirements

Through its detailed analytical structure, Financial Studio offers a solid framework for Basel compliance, but also specific solutions that accurately and flexibly apply the local Basel II and Basel III regulations and optionally the associated reporting to supervisory authorities. Based on the analysis of risk and capital usage, in-depth investigation per product, asset class or customer group enables you to identify initial areas of over-exposure and capital need. Financial Studio

  • supports the different evolutions of local regulations from Basel II to Basel III,
  • supports Pillar 1, Pillar 2 and Pillar 3 quantitative requirements,
  • supports all applicable approaches across different portfolios,
  • allows for even greater risk sensitivity by providing an integrated solution that evolves easily from standard to more complex calculations,
  • integrates both internal and external current and historical data,
  • supports the identification, gathering, and calculation of the key risk components,
  • contains a wide range of financial indicators for operational and market risk management.  

Liquidity Risk

FinArch's Liquidity Risk Framework module provides a full understanding of the nature of the risks that are taken and can be tailored to customer specific business needs and/or regulatory requirements. The module can be integrated with internally developed models and enables complete understanding of how liquidity risk behaves under various scenarios. Financial Studio

  • measures various liquidity risk measures, such as finding gaps which can be compared to the value of liquidity reserve and concentration risk measures,
  • includes a powerful stress testing engine.

Read why the world's biggest bank, HSBC, selected Financial Studio to manage its liquidity risk. Visit our Liquidity Risk Resource Center. Request here our Liquidity Risk white paper.

Asset Liability Management (ALM) 

  • computes earnings and capital sensitivity to interest rate changes using a.o. repricing gap analysis, earnings-at-risk and wide simulation features,
  • manages liquidity risk (see above liquidity risk section),
  • computes FTP rates to gauge the effective contribution of each unit to a firm's net interest margin.  

Request here our ALM white paper.

Economic Capital

Economic capital is attributed on the basis of market risk, credit risk, and operational risk. Financial Studio allows :

  • economic capital methodologies to be applied across products, clients, lines of business and other segmentations, as required, to measure specific types of performance,
  • the resulting capital attributed to each business line to provide the financial framework for understanding and evaluating sustainable performance,
  • a financial institution to actively manage the composition of the business portfolio and to increase shareholder value.

Request here our Economic Capital white paper.

RAROC

The combination of Financial Studio’s Basel solution with profitability calculations delivers an integrated platform for the implementation of an enterprise-wide strategy for RAROC as it :

  • provides the basis for effective economic capital budgeting and incentive compensation at the business-unit level,
  • allows to measure a business unit’s contribution to shareholder value,
  • allows to assign capital to business units after determining the risk-adjusted rate of return and, ultimately, the economic added value of each business unit.  

 Looking for more information about FinArch's risk and capital management solutions ? Contact us.