Risk Integrated, the leading consulting and technology firm focused on risk management for specialized finance, today announced they have added new functionality to their Specialized Finance System (SFS).
Previously the SFS gathered detailed portfolio information to feed comprehensive risk models. The functionality has now been extended to allow clients to generate detailed, sophisticated portfolio reports for senior management, board members and those who represent the bank to investors. The SFS delivers the most detailed risk analytics for commercial real estate lending available today.
In times of market turmoil, it is imperative that banks can accurately and quickly generate reports and provide information to explain and assess short and long term risk. The SFS was developed to identify underlying risks in a portfolio and help clients stay ahead of transparency and reporting needs. Unlike other solutions on the market, SFS consolidates data across systems, business units and geographies to give standardized deal reports and comprehensive portfolio reports built from the ground-up. The reports don't just look at the portfolio as a whole they look at every single element of every loan to build up an overview. The SFS brings together disparate data to provide detailed reports, accurate stress-testing and Basel compliant risk statistics. These insights allow the bank to understand its sources of risk and address them. Of equal importance, the reports give timely, reliable information that bring confidence to the board, regulators and investors.
Dr. Chris Marrison, CEO of Risk Integrated, considers the SFS advancement to be a key in unlocking liquidity. "The liquidity crisis is really a transparency crisis," Marrison said. "It rose out of the credit crisis because no one was sure whether their counterparties were credit worthy. This is partially due to a failure of banks to disclose information, but even more due to the difficulty that banks face in understanding what is actually in their own portfolio."
Using the new XML capabilities of SQL 2005, the SFS can now slice the hierarchical data in any way that is required by management to understand the underlying risks. For example, the SFS can generate a report on the Debt Service Coverage Ratio (DSCR) of all the properties containing one particular tenant name and show how the DCSR on the properties would change if the tenant declared bankruptcy. These reports allow banks to view which deals are risky and where to focus management attention for restructuring the most important deals.
Dr. Yusuf Jafry, CTO of Risk Integrated, considers this to be a perfect example of using the right software tools for the right job. "To consolidate the data for the SFS analytics we use many different tools, depending on the data source," said Jafry. "By exploiting the new XML capabilities of SQL 2005, we have now also solved the reverse problem of allowing users to extract the data in any way that is most meaningful to them without having to re-engineer the databases or construct complicated data views or data warehouses."