After a hugely successful implementation in London during 2010 for the bankâs European operation, Financial Studio from FinArch has been selected by the bank as its global solution for Liquidity Risk Calculation and Reporting. In the first instance, the bank will focus on going live in the G20 countries.
The solution provides the bank with a common data architecture in which to store, manage and enrich data from all parts of the business. Data is enriched through a sequence of calculators, addressing Valuations and Cash Flow Analysis, Liquidity Risk Analysis - Gap Analysis, Concentration Risk and Ratio Monitoring. FinArchâs Simulation Engine caters for the up and coming stresses to be prescribed by the multiple regulators as the bank can stress their Liquidity Risk measures across multiple business scenarios.
The bank will also put in place a global Liquidity Risk measurement reporting solution using Financial Studio, the benefits of which go far beyond regulatory compliance. Financial Architects will provide regulatory compliance in this respect for all of the G20 countries. Financial Studio will also be used by the bank globally from the provision of internal reporting on Liquidity.
While addressing the immediate needs of Liquidity Risk, Financial Studio provides an excellent basis on which to begin the process of adopting Basel III. Financial Studio, a recognized market leading product for integrated risk and finance, provides arguably one of the most mature solutions in the market place with which to begin addressing the regulatory challenges on counter-cyclicality, liquidity risk, counterparty credit risk, leverage ratio and the uplift of the minimum capital requirements.
"We are very proud of what we achieved in 2010 in helping this customer to be one of the first banks in the UK to successfully go live with their Liquidity Risk reporting obligation to the FSA. To now have the further endorsement of the bank deciding to choose Financial Studio as their Global Liquidity Risk platform is a monumental testament to FinArchâs superior product functionality, deployment competence and vision", comments Nigel Lee, Chief Commercial Officer at Financial Architects. âOur solution is part of a broader integrated Risk and Finance solution genuinely providing risk, finance, accounting and reporting functionality in 1 single unified platform.â Adds Lee.
âMany vendors claim to have integrated risk and reporting solutions, but we see now from the âgo-liveâ success of our customers, that we remain genuinely unique in the market with our solution. As a basis for adopting Basel III and as the basis for all up and coming challenges in the area of risk and finance there is no other solution that offers this level of functional breadth together with the economy of scale of our Financial Resource Planning based unified platform.â Lee concludes.
Financial Studio is a comprehensive integrated Risk and Finance solution based on a single version of the truth in data terms, i.e. a common core Financial Data Architecture. Based on the Finance Resource Planning (FRP) concept, the solution provides complete functionality for the management of the entire accounting chain, enterprise risk management function and internal and external reporting obligations.
âThe year 2010 will be remembered as the year in which regulations that will shape the future of the financial sector and risk management began to form. We at Financial Architects are continuously enhancing and broadening our product suite to ensure they are compatible with the wave of new regulations such Basel III, Dodd-Frank Wall Street Reform and IFRS9,â says Nancy Masschelein, Head of Product Strategy at Financial Architects.
âThe Basel III package calls new rules on liquidity, leverage, capital and credit value adjustments requiring tools to adequately measure the increase in quantity and quality of capital, to calculate the liquidity needs to face stressed periods and to manage counterparty credit risk.â
âAlso, the financial crisis spurred appetite for real-time risk modeling and analytics capabilities in the financial markets. Risk pricing, capital and funding impact need to be communicated to traders in the front office before a deal is finalized requiring as close to real-time risk analytics as possible. A focus on high-frequency trading activities and simulation analytics requiring an increase in processing speed though the use of high performance computing technology and clouds.â Continues Masschelein.
"Financial Architects can help you to meet the upcoming regulatory requirements and to manage the transformation of the risk management and the front office functions that happened over the past two years, which is why the choice of the worldâs largest banks to opt for Financial Studio as a global platform for liquidity risk measurement is the best way to optimize leverage on investments.â Masschelein concludes.
Financial Studioâs Risk Return Framework covers the measurement and management of all risk types. Not only Liquidity Risk as mentioned above, but also Credit Risk, Market Risk, Operational Risk, all of which are available to FinArchâs customers even if in the beginning the solution is being implemented for more specific purposes. The Simulation Engine and Analysis Engine work in parallel with all risk types, not just liquidity. In addition the framework provides comprehensive functionality for Risk Adjusted Performance measurement and Economical Capital, including aggregation and allocation.