Home Trust cuts reporting time by more than half with SAS®
The trust company was using Excel spreadsheets to capture data from myriad sources for reporting and analysis of risk. Now, with the use of SAS Detail Data Store, Home Trust reduced the time it takes to produce reports from 15 business days to five, allowing it to better manage its customers' credit profiles and optimize risk. Working closely with SAS® Professional Services®, the organisation completed the project ahead of schedule and under budget.
Home Trust Co., one of Canada's leading trust companies, offers a range of financial product and service alternatives, including mortgages, Visa cards, deposits and retail credit services. The company focuses primarily on clients who don't have traditional credit backgrounds and whose needs are not met by larger financial institutions, such as self-employed entrepreneurs or borrowers with equity in their property.
Whether Home Trust is helping clients buy their first homes or consolidate higher-interest loans, the company needs to monitor and measure risk regardless of source – not just credit risk, but market, operational and strategic risks. Previously, the company was using a anotherBI tool for calculating internal credit scores and behaviors, using data from its main banking platform. However, not all of its data was available on this platform; one data warehouse captured mortgage information, for example, while retail credit products were captured on a completely different platform.
"We had to pull all of this together in an Excel spreadsheet environment and try to make sense of it," said Kerry Reinke, Chief Risk Officer of Home Trust. Standard reporting was taking up to 15 business days, a time-consuming, laborious process that included transmitting the data into the mortgage warehouse, grabbing it in Excel, manipulating it, reconciling it and then producing the reports. And that was before any analysis of the data.
"Risk information has to be available at the same time as your volume and sales data, otherwise it's difficult, if not impossible to really integrate it into business decisions," said Reinke. "For risk to be relevant you have to be able to assess your overall risk profile and be capable of pushing that information down to where decisions are made."
Home Trust started looking for a solution to develop a credit data warehouse associated with reporting capabilities and analytical tools, and chose to implement SAS Detail Data Store, part of SAS Banking Intelligence Solutions. These solutions combine analytical and data management technology to quickly bring together – and glean intelligence from – reams of data in various silos throughout an enterprise. SAS Detail Data Store enables Home Trust to calculate measures of risk – such as market, credit and ALM, as well as firm-wide risk measures – using models and correlated aggregation techniques.
Home Trust worked in sync with SAS Professional Services and developed a strong relationship that remained intact throughout the project. "It was a very positive consulting experience," said Reinke. "The SAS Professional Services team leader knew the solution inside and out. And we worked together as one team, so there was more originality in the product."
The project was completed ahead of the scheduled timelines identified in the project plan, taking less than four months to implement. It also came in 8.5 percent under budget. The budget excess is being used for ongoing support from SAS Professional Services, so the risk management department is now in a position to build analytical marts.
All data associated with credit risk across all of the company's products – including mortgages, credit cards and retail lending – is now accessible in one spot. "If we want to apply a behavior score to a credit product or mortgage, we can do that, regardless of product," said Reinke.
Using this solution, Home Trust has reduced its reporting time by more than half. Base reports that used to take up to 15 business days to complete are now ready in five days. And the company is able to push information down to individual product sales teams and branches, meaning it can influence decisions on an individual level. Furthermore, the implementation of SAS Enterprise Guide with SAS STAT has also helped the company in the areas of predictive modeling and strategy analysis and design.
"Risk is relevant now," said Reinke. "If risk reporting is coming out on day 15, it's almost trivial. Now we can challenge or prove our assumptions and make better incremental decisions. Risk isn't only about minimizing losses – it's about optimizing risk adjusted revenue opportunities. We're better able to manage our portfolios' credit profile, and we can adjust our underwriting criteria and strategies to optimize the portfolio." Also, the time saved on reporting frees up more time for value-added analysis, which will benefit the business going forward.
"Now we have a very strong understanding of our portfolio and can demonstrate this to our Board and regulator," said Reinke. "We're making better decisions and can give our board confidence in the credit quality of the portfolio. Our forecasts are much tighter, and our regulators and auditors are much happier with the strength behind those forecasts. And any time you can understand and price risk better than anyone else, you're at an advantage."
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Home Trust had to pull together data from different sources to measure and monitor risk, so reporting was a time-consuming, laborious process.
Using SAS Detail Data Store, all data associated with credit risk is now accessible in one spot, which has reduced the company's reporting time from up to 15 business days down to five.
Home Trust is better able to manage its customers' credit profiles and can now spend more time on analysis instead of basic reporting, making risk more relevant.
“Our forecasts are tighter, and our regulators are happier with the strength behind those forecasts.”
Chief Risk Officer, Home Trust Company