Moody’s Analytics, a leader in risk management solutions, today announced the release of RiskAnalyst 5.4, a comprehensive enterprise-wide risk management platform that standardizes the way firms collect, analyze and store credit data to make better lending decisions. The updated RiskAnalyst incorporates Global Cash Flow functionality and a unique Commercial Loan Workflow module, allowing customers to enforce policies across the commercial loan origination lifecycle.
Commercial lending has historically been very paper intensive and subject to human errors. The origination process has often lacked policy controls, been developed within silos, and operated separately from an organization’s overall risk management architecture. RiskAnalyst closes these gaps, meeting market demand for a comprehensive and integrated commercial lending framework to manage, streamline and centralize commercial loan originations and servicing. It allows institutions to implement, automate and enforce risk management policies throughout the loan lifecycle, integrate a wider spectrum of analytic products and analyze global cash flows.
With the new RiskAnalyst Workflow module, an organization can incorporate their prospecting, underwriting, risk rating, limits management, loan pricing, risk return and capital assessment policies into one workflow system. In addition, the introduction of Global Cash Flow functionality and reporting improves a lender’s ability to estimate the probability of default (PD) of a commercial loan by taking into account all the cash flows involved in a deal – including those from individual borrowers, sponsors and guarantors – not just the cash flows from the business itself.
“Lenders and regulators have been looking for three major improvements in the way commercial loans are made,” says Andy Schmidt, Research Director at TowerGroup. “These include the ability to view the cash flow of the entire borrowing relationship from the borrower down to the guarantor, the ability to automate and standardize as much of the underwriting process as possible and, most importantly, the ability to analyze the impact the loan will have on the portfolio before the loan is made.”
Risk managers are now faced with finding solutions that enforce consistent lending policies, account for the complexity of their own internal loan systems, and assure the most accurate portfolio information is being considered. John Baer, director of product management at Moody’s Analytics, comments: “The new RiskAnalyst Workflow module solves a number of pervasive problems encountered by risk managers in the commercial loan underwriting and servicing process. It helps financial institutions to standardize loan processing and decision making across different portfolios and demonstrate compliance to regulators.”
RiskAnalyst is designed to grow with customers’ commercial loan originations business. The latest release also integrates over 20 RiskCalcTM models. RiskCalc is the premier private firm probability of default model, based on Moody’s Credit Research Database (CRD™). RiskCalc’s expected default frequency (EDFTM) measure combines financial statement and equity market information into a highly predictive assessment of standalone credit risk, with models that cover approximately 80% of the world’s GDP.