Improve Visibility into Exposure with Advanced Risk Management Software
With risk management at the top of the agenda, your efforts to develop a true culture of risk may be challenged by internal silos and disparate platforms. FIS™’ risk management software and analytics solutions help you gain visibility of your enterprise risk across multiple asset classes and comply with global regulations.
Create a holistic view of risk for managing and pricing risk across the enterprise.
Provide actionable information to traders and management through risk management software to optimize your organization’s enterprise risk and capital profile.
Work across all asset classes to better understand your enterprise risk exposure and comply with global regulations.
Integrate market, credit, liquidity and operational risk management with advanced risk management solutions.
A rise in interest rates could divert customers’ investment strategies in a different direction, which means companies must maintain dynamic, forward-looking balance sheet management. FIS™’ Ambit Asset Liability Management (ALM) solution can help you minimize liquidity risk and guide your balance sheet in the right strategic direction through funds transfer pricing.
Gain the ability to perform full and multidimensional analysis of your balance sheet.
More accurately model interest rate scenarios, economic valuation, customer behavior and many other variables.
Strategically manage your surplus cash reserves, releasing cash as appropriate for generating revenue.
Ensure that regulatory standards are met.
Empower different business units to work on the same data platform, whether pursuing specific objectives or corporate goals.
Best Practice Risk Data Aggregation and Risk Reporting
The principles for effective risk data aggregation and risk reporting, or BCBS239, are causing banks to undertake a comprehensive review of their data governance, IT infrastructure, data quality management and risk reporting. FIS™’ Adaptiv risk management software and experienced team go a long way to ensure compliance with the principles laid out by the Basel Committee.
Understand the data lineage of the information contained in your risk management reports.
Report transparently across any of the vital risk data captured in FIS’ infrastructure using real-time OLAP technology.
Rely on the audit and control workflows in the FIS solution to ensure risk data is under appropriate governance.
Consolidate as much of your risk data in one secure and robust risk infrastructure.
Under pressure to meet complex regulatory requirements, generate economic capital and optimize profitability, banks’ risk teams must satisfy demands from regulators, board members and customers. Based on advanced risk management software, the Ambit Capital Management solution for reporting and compliance ensures you are compliant, can set appropriate bank limits and develop effective risk mitigation strategies.
More efficiently manage regulatory reporting across Pillar 1 and Pillar 3 in all jurisdictions under which you are required to report.
Reduce reporting lead times through a capital management solution that streamlines the process associated with monthly and quarterly regulatory report submissions.
Minimize the manual work and costs associated with reporting processes driven by IT and finance.
More fully support the day-to-day decision-making of frontline staff with a key input into risk-adjusted performance monitoring.
Improve auditability and traceability.
Enable business users to define bottom-up stress tests via a flexible scenario analysis module.
Aggregating firmwide credit exposures is a challenge due to fragmented data sources, poor data integrity and inconsistent exposure measurement. Many systems lack the power to handle the complex calculations necessary to create an accurate view of consolidated credit exposures. FIS™’ Credit Risk solution measures, manages and controls credit risk in real time across the enterprise.
Gain a full picture of your credit exposures across the trading book (counterparty risk), banking book (lending, trade finance, etc.) and issuer risk (securities positions).
Run complex calculations based on an aggregation of all risk-taking activities as they happen.
Measure, manage and control your credit exposure under a global limits framework reflecting true credit appetite at meaningful levels of your portfolio.
Make better business decisions, such as pricing at inception, based on a more accurate and complete picture of credit risk.
Achieve regulatory and economic capital savings through the use of effective risk mitigation.
Reduce the operational overhead of managing your credit limits framework through intelligent workflows covering predeal approvals, limit approvals and breach management.
With the increased focus on risk and managing regulatory capital on a backdrop of central clearing and bilateral margining, having a centralized view of counterparty credit risk and associated risk-based pricing is essential to optimizing a bank’s competitiveness. FIS™’ Adaptiv Credit Risk allows banks to reliably generate and use mission-critical counterparty credit risk management information.
Gain a single counterparty credit risk management solution to measure, manage and control exposures under a multidimensional global limits framework.
Use a full palette of exposure measures from Monte Carlo PFE simulation, XVA, mark-to-market plus add-on, SA-CCR (new Basel methodology), settlement risk and issuer risk.
Aggregate exposures respecting netting agreements, collateral pools, central clearing and bilateral margining.
Quickly and accurately assess predeal the incremental impact of a potential transaction on all affected limits and XVAs.
Identify the optimal counterparty from a limits and capital consumption perspective for a given transaction.
The fundamental review of the trading book (FRTB), the biggest upheaval of trading book market risk measurement since the 1990s, requires a vastly greater number of computations, improved data management and more granular model application. FIS™' FRTB risk management solution provides standardized and internal models approach (IMA) calculations to manage the sometimes unintuitive capital impacts.
Use either a full revaluation approach based on the comprehensive Adaptiv analytics pricing library or external price information supplied as sensitivities and P&L vectors.
Comply with regulations with workflows for managing expected shortfall calculations, corrections, back testing, P&L attribution test, nonmodelable risk factor identification and quantification and time series management.
Deploy this component-based solution as a calculation engine only or as a full FRTB infrastructure featuring trade/static/market data management and calculation workflows.
Optimize capital across approaches with real-time what-if capability.
After nearly a decade of low interest rates, hampering both net interest income and net income margin, the Basel Committee for Banking Supervision has published the final standards on interest rate risk (BCBS 368). These standards are set to take effect at the same time when banks’ treasuries and risk departments are deciding how they want to position their balance sheets against rising interest rates. Any decision on the tenor mismatch strategy at the dawn of a new rate cycle is likely to shape net interest income – and its volatility – for the next decade or so. FIS’ IRRBB solution helps banks:
Strategically position against interest rate movements and optimize the funding mix for a higher and more stable earnings stream
Achieve stable returns and dividend payments in a changing macro environment for a lower cost of capital
Leverage hedging strategies to effectively mitigate interest rate risk
With international financial reporting standard (IFRS) 9 coming in January 2018, you need to plan now for this accounting regulation’s new impairment model. FIS’ Ambit Focus IFRS 9 helps you assess its impact on your balance sheet, profits and losses and quantify the effects of modified risk parameters and segmentations on historic loss allowances.
Support stage allocation with ease.
Calibrate your calculations.
Forecast future loss allowances under various business scenarios and economic conditions.
Make credit risk an integral part of balance sheet management.
Post-crisis regulations are driving most derivatives to be initial margined. The collateral required is expensive to fund, driving an increased focus on understanding the impacts of initial margin (IM) calculations on funding requirements, counterparty exposure, margin value adjustment (MVA) and bank stress tests. Adaptiv for Initial Margin helps you comply, manage liquidity risk and reduce costs.
Ensure reliable IM calculations and efficient clearing processes with a dedicated risk management software solution.
Reduce trading and collateral costs.
Perform high-performance simulations for potential future exposure under initial margin and MVA calculations.
Starting from 2016, on a phased basis, all Financial Institutions have had to comply with the BCBS-IOSCO (https://www.bis.org/bcbs/publ/d317.pdf) rules for margining of non-centrally cleared derivatives. These rules, introduced in the wake of the financial crisis to safeguard the non-cleared derivatives market, include a wide range of requirements such as mandatory exchanging of variation margin and bilateral initial margin, restrictions on eligible forms of collateral and specific terms in collateral documentation.
One of the most challenging aspects for many firms is measuring and agreeing to the initial margin to be posted between covered counterparties.
Firms have two options – an extremely punitive schedule-based approach or the ISDA Standard Initial Margin Model (ISDA SIMM™), which is being widely adopted across the industry as the standard risk-sensitive methodology.
Implementing ISDA SIMM poses challenges for firms. From a computational point of view, the methodology contains many details that require accurate implementation. The standard also has variations across jurisdictions and is evolving over time to capture all relevant risk types.
The calculator will be required firstly for the end-of-day calculation of initial margin obligations to each counterparty, but with front office desks being charged for all the costs they incur, the capability to perform high-performance what-if (link to what-if document) will inevitably be an important requirement for these stakeholders.
FIS’ solution for non-cleared derivatives margin is a fully featured, high-performance engine designed to allow firms to comply quickly and easily with all initial margin calculation and analysis requirements. The engine is built using the market-leading Adaptiv Analytics solution and includes built-for-purpose in-memory technology for deep and insightful analysis.
The constant issuance of new regulations is a challenge, but compliance alone doesn’t constitute a profitable business: It takes an optimized business model, within regulatory restraints, that factors in newly introduced regulatory ratios. With the Ambit Liquidity Risk Management solution, take liquidity risk management beyond compliance and redirect your focus to performance.
Integrate upcoming regulatory changes into balance sheet planning, setting the stage for profitability within constraints.
Analyze potential risk scenarios, factoring in the new liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR).
Ensure consistent risk data and models to simulate the impact of the strategy on future income and compliance.
Make the LCR and NSFR an integral part of the steering framework to set the right incentives and put the strategy into practice.
Use a variety of forward-looking scenarios and stress scenarios to gain a clear view of your liquidity under different conditions.
Determine the appropriate liquidity buffer with greater accuracy based on your contingent liquidity needs and regulatory requirements.
A Specialized Market Risk Solution for Compliance, Insight and Control
To stay current with regulatory obligations, you need a solution positioned for today’s and tomorrow’s needs. FIS™’ market risk solution covers market risk management in the trading book and banking book and supports both internal risk management requirements and current and future regulations, including fundamental review of the trading book (FRTB) and interest rate risk in the banking book (IRRBB).
Manage market risk across trading and banking book positions.
Measure, control and analyze market risk with deep asset coverage from simple assets to exotic assets.
Provide real-time actionable information to decision-makers.
Ensure extensibility for new instruments and valuation models ensuring the time to market for new products is minimized.
A host of factors led to catastrophic failure of risk management during the financial crisis, with many lessons learned. Avoiding similar calamities requires the combination of market, credit, operational and strategic risk disciplines. The Ambit Operational Risk solution helps you capture operational risk issues and measure their economic impact.
Better manage your full-, short- and long-term operational and strategic risks so you can comply with regulations.
Assess risk costs more accurately and effectively.
Bring new efficiencies to the capture, approval and reporting of errors, incidents and omissions.
Gain a robust foundation for governance, risk and compliance data capture and management reporting.
Enable users to quickly and efficiently perform a range of tasks, which boosts productivity and lowers training costs.
Going Beyond the Formula with Enhanced Credit Risk Management
Basel’s new standardized approach for counterparty credit risk (SA-CCR) represents a seismic shift in nonanalytic exposure measurement for capital purposes. Its impact in terms of implementation effort and capital adequacy should not be underestimated. While the calculations are straightforward, the data requirements and regulatory interpretation issues are significant. FIS™’ Adaptiv risk management software solution can help.
Comply with regulations assuredly and transparently.
Respond to specific business modeling choices with FIS’ flexible calculation implementation.
Enhance risk management with forward SA-CCR and internal SA-CCR metrics.
Evolve to capture cost of capital with capital valuation adjustment (KVA) simulation.