SAS Leads in Credit Risk Management Software

To adhere to the capital requirements of the New Basel Capital Accord (Basel II), today’s financial services institutions are under extreme pressure to monitor credit, market and operational risk even more closely.

SAS^® Credit Risk Management and SAS Credit Scoring for Banking are helping more than 20 banks and financial services organizations breathe a little easier. These solutions, released in 2004 to assist with the capital adequacy and risk governance requirements of Basel II, have staked SAS’ claim as the leader in credit risk software.

Customers selecting SAS credit risk solutions include: Argenta Spaarbank, AXA Bank, Banif Banco, BNbank, DeltaBank, Erste Bank, GMAC-RFC, Handelsbanken Rahoitus, HBOS, Kookmin Bank, National Australia Bank, Samlink, Sampo Bank and SEB.

Basel II and beyond
SAS maintains its leadership in enterprisewide risk management through continued global investment and dedicated risk practices set up to support Basel II customers at both the regional and local levels. Credit risk is a pressing issue for financial institutions due to the regulatory imperatives of Basel II and the desire to improve business practices surrounding credit risk management. Organizations recognize that SAS Credit Risk Management addresses Basel II compliance and beyond.

"BNbank’s objective with our investment in SAS Credit Risk Management, in addition to complying with the Basel II regulations, is to improve the risk management and the credit-decision processes in the bank," says Svend Lund, director of finance at Norway-based BNbank. "The SAS software solution and our experiences with SAS consultants have confirmed our belief in the decision to select SAS as prime vendor for our risk management and decision support platform."

An integrated approach
According to a recent case study on credit risk by GartnerG2, "Rather than deal with a variety of vendors offering point solutions, institutions of all types are seeking vendors that offer an integrated array of risk management components and tools designed to operate together. Enterprise architecture that is reusable and standardized – including all systems elements, from database to middleware to financial applications – is essential to sustain consistent risk management practices." (Source: GartnerG2, Lloyds TSB Tackles Credit Risk Within an Enterprise Risk Strategy, Doug McKibben, November 2004.)

"Our customers want to meet their short-term risk compliance needs without compromising their long-term business and technology strategies," says Peyman Mestchian, director of the SAS EMEA risk management practice. "Organizations are now revisiting their existing systems and looking for a more integrated approach. SAS’ ability to link risk governance with risk management provides compelling business benefits for managing risk across all areas."

Latest version of SAS Credit Risk Management
As a continued part of the SAS Banking Intelligence Solutions, the new version of SAS Credit Risk Management helps banks improve capital allocation, increase profitability and maximize returns for shareholders more efficiently. Enhancements include:

• Preconfigured analytics for calculating regulatory capital and the capability to compute economic capital. Organizations can define different calculation methods by asset class and perform all necessary computations in one environment. Users can store preferences based on different regulatory needs.
• Unique capability to optimize risk mitigants by counterparty.
• Seamless resource integration that allows users to dynamically link models for estimating probabilities of default and loss given default.
• Web-based interface that performs ad hoc analyses, supplies drill-down reports, offers customizable data and publishes regulatory reports.

SAS Risk Dimensions, included in the SAS Credit Risk Management solution portfolio, also offers important new capabilities in its latest version. Organizations will find enhanced functionality for defining counterparties and handling all types of risk mitigation techniques. A Java-based interface improves client/server experience and delivers integrated user/group security. Also, the solution now sits on top of the SAS Intelligence Platform, an end-to-end framework for creating and sharing enterprise intelligence.

"Basel II requires organizations to measure and manage credit risk at a more granular level than in the past," says Jeff Hasmann, SAS global credit risk strategist. "This requirement has created an imperative to examine and reengineer credit risk systems with respect to data management, analytics and reporting. SAS is unique in offering robust data management technology with advanced analytics and Web-based reporting on a single end-to-end platform."

Credit scoring and advanced analytics in one solution
Increasingly, financial institutions are turning to technology vendors like SAS for help in satisfying new regulatory requirements and improving their business practices. Ensuring consistency in both data and model management is a regulatory mandate and a necessary step in improving credit risk management. SAS offers sophisticated functionality that helps institutions to enhance internal controls, measure and manage risk, and provide audit trails for both data management and in-house modeling processes. SAS Credit Risk Management is unique in offering both credit scoring and advanced analytics within one solution.

SAS Credit Risk Management is part of the SAS Risk Intelligence offering, which supports all aspects of enterprise risk management. SAS Risk Intelligence provides an integrated platform of comprehensive solutions focused on creating enterprise transparency, mitigating exposures and lowering the total cost of ownership for credit, market and operational risk. Tapping SAS’ proven strength in data management, SAS Risk Intelligence offers consolidated and contextual views of all risk and compliance information, enabling more timely, accurate and effective risk governance. In addition to providing cost savings and the ability to lower risk exposure, SAS Risk Intelligence affords opportunities to use deepened knowledge of customers, markets, channels, third-parties, counter-parties and geographies to increase revenue and capital.