The recent global financial crisis reminded financial institutions that enterprise risk management is complex.
Operational and strategic decisions require advanced, integrated and scalable risk management infrastructure. SAS, the leader in business analytics software and services, introduces the next generation of SAS Risk Management for Banking, a firmwide solution for risk management in the banking sector.
"Organizations need to support several different risk application streams within one common environment," said TowerGroup analyst Rodney Nelsestuen. "Business units require specific risk calculations and monitoring capabilities while executive levels of the organization will need integrated and aggregated risks to create enterprise measures."
Using SAS Risk Management for Banking, which includes data management, advanced analytics and reporting, organizations can measure exposure and risk across all risk types and books of business, and distribute incentives for consistent optimization of risk-adjusted returns.
SAS' fully integrated set of risk management applications cover asset and liability, market, credit and firmwide risk and economic capital calculations. The flexible framework lets banks introduce innovative risk measurements and models within a fully transparent and auditable environment. Better risk-based business decisions deliver greater competitive advantage.
A fundamental design goal for SAS Risk Management for Banking was a common risk platform for all applications, placing integration at the core. A banking-specific data model, SAS Detail Data Store for Banking, is the single source of all information for the risk data warehouse.
By eliminating or reducing data inconsistencies through comprehensive data management, SAS increases control over and ownership of risk management data. Because risk measures may not be additive, reporting must be flexible and powerful enough to deliver the right information to the right people at the right time. The SAS Business Analytics Framework supports reporting requirements for senior management, regulatory compliance or business unit performance. In addition, SAS lowers total cost of ownership with a single, extendible solution that integrates easily with third-party risk software.
"The complexity, severity and interdependencies of enterprise risk management require an advanced, integrated and scalable infrastructure to protect the financial industry, investors and other stakeholders," said David Rogers, Global Product Marketing Manager for Risk at SAS. "SAS Risk Management for Banking helps banks respond to the current and future risk challenges."
SAS Risk Management for Banking comprises four integrated applications:
* SAS Asset and Liability Management for Banking - Valuate traditional balance-sheet instruments, such as loans and deposits, and associated (off-balance-sheet) hedges, factoring in embedded options, such as prepayment and withdrawal, as well as credit risk, liquidity risk, etc.
* SAS Credit Risk for Banking - Calculate and stress-test credit exposures, taking into account the effect of netting, collateral and margining, as well as credit derivatives book.
* SAS Market Risk for Banking - Valuate complex market instruments, perform stress tests and calculate Value at Risk (VaR), expected shortfall and other risks using various methods, including historical simulation, covariance simulation, analytical models and advanced, user-defined models.
* SAS Firmwide Risk for Banking - Calculate the firm's aggregate risk using correlation matrices or correlated copula aggregations of marginal risk distributions.