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KFH Malaysia automates risk management with SAS®

Kuwait Finance House (Malaysia) Berhad’s Risk Management Division chose SAS OpRisk Management to gain a single, centralized way to identify, monitor and analyze operational risk. Using alerts and a reporting dashboard, the bank now can assess risk more quickly and take mitigating actions.

The first foreign bank granted a license under Malaysia's Islamic Banking Act of 1983, KFH Malaysia was established on the heels of Bank Negara Malaysia's decision to open the country's Islamic banking industry to qualified foreign players. As the regional headquarters of KFH in the Asia-Pacific region, KFH Malaysia's main role is to provide innovative Shariah-based financial solutions to its customers.

Risk management more than compliance
At the fast-growing Islamic bank, managing risk proactively is not just a matter of compliance – it is a necessary foundation for growth. KFH Malaysia's Risk Management Division implements and maintains the bank's risk-related strategy and independent control processes. It monitors the relevant risk exposures and issues against agreed limits and responds accordingly.

Before implementing SAS, the bank managed operational risk data manually via Excel spreadsheets, Word documents and hard copies. The manual environment made it difficult and tedious to analyze operational risk and trends at a granular level. Moreover, it was time-consuming and required more manpower to analyze the data and prepare operational risk reports timely.

Ken Yon, Acting Chief Risk Officer, says the key features of SAS OpRisk Management that make a difference at KFH include:

  • Rich visualization – Heat maps, scorecards, incident trends and other interactive reports.
  • Automation – Flexible validation workflow and email alerts make it easier to monitor trends and take proactive measures.
  • Centralized risk library – Linking all related operational risk data makes it easier to visualize how the elements connect.


Mitigating operational risk
Ken Yon says the chief benefit comes from improved effectiveness in mitigating operational risk. The bank created a one-stop center where users submit operational risk data online for the Operational Risk Management team to review, analyze and monitor.

The paperless environment and fast access to insightful decision support have resulted in cost savings for the bank. Automated activity summaries and status reports save time, allowing the Operational Risk Management team to focus on higher priorities.

Support throughout implementation
The implementation was not without challenges, says Ken Yon, but the SAS team provided consistent support and follow-up to make sure the issues were addressed favorably.

SAS also provided consultation and advice to help KFH make informed decisions. Both SAS and KFH Malaysia worked efficiently to ensure the project was completed on time.

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KFH Malaysia

Business Issue:
Manual data analyses and lack of centralized risk data.
Benefits:
Greater efficiency, faster response times and consolidated view of all operational risks and compliance information allow for more accurate and improved risk-management performance.
Platform
Operating System: Windows Server 2003 R2 Enterprise Edition SP2 – 32 Bit, Database: PostgreSQL 8.3, Application Server: Oracle BEA WebLogic 9.2

The system is easy to use and its implementation has reduced paperwork significantly.

Ken Yon

Acting Chief Risk Officer

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