EON Bank leads the way with SAS® for Operational Risk Management

EON Bank has a clear vision and mission to become "The Preferred Malaysian Bank" with best-in-class standards in delivery capabilities, customer experience and performance excellence. With its implementation of an innovative and comprehensive operational risk management (OR) solution, it is certainly closer to its mission.

EON Bank, a leading Malaysian banking group, provides a comprehensive range of conventional and Islamic banking services and products. To achieve its goals, the bank had to make strengthening its risk management and credit culture a key strategic focus.

The Group Risk Division at EON Bank is responsible for setting the risk management framework and developing tools and methodologies for the identification, measurement, monitoring, control and valuation of risks. One of the guiding principles it has worked by is that line managers at all levels are responsible for directing and controlling their own operational risks, and reducing EON Bank's exposure to unexpected losses and managing expected losses.

However, EON Bank's previous OR management information system had functioned primarily as a data capturing engine with limited reporting and analytical capabilities. The system was inflexible, required a lot of manual data entry, and didn't connect with other OR tools for meaningful consolidation of the bank's OR profile.

EON Bank chose SAS to improve its capabilities in capturing OR data and performing risk scoring to provide a consolidated view of all OR and compliance information, enabling more accurate and effective enterprise risk management.

Says Mr. Choo Wai Lim, Head of the Operational and Continuity Risk Department: "We were looking for a solution to enhance EON Bank's capabilities towards a more matured analysis of OR data, improve risk management performance and efficiency, and to prepare EON Bank for a more robust approach when the time comes."

The OR system is being deployed to all the bank's branches in Malaysia, and as Mr. Choo Wai Lim points out, the benefits include:

• Greater efficiency and faster response times.
• Automation of existing manual functions and processes.
• The ability to view and validate loss event, risk catalog, control self-assessment and key risk indicators.
• Linkage among OR tools for consolidated risk profile analysis and tracking.
• Built-in standard reports, with additional customized reporting and analysis where required.
• Accountability by business units in managing their own OR.
• Differentiation of conventional and Islamic OR, which is essential in management reporting to the two entities – a necessary capability the previous system lacked.
• Competitive edge from managing and reporting OR with a global solution.

"Prior to the SAS OpRisk Management implementation, a risk officer would spend one week to key in figures into Excel. This has vastly improved turnaround times," said Mr. Choo Wai Lim. "The solution has given us an edge over the competition because of its extensive capabilities, the automated workflow and the reporting capabilities."

Using SAS, EON Bank produces daily reports for loss event, key risk indicator, control self-assessment, risk catalog, and issue and action plan. All levels of users use the reports for maintenance, information and follow-up action and to prepare management dashboard reports for the management committee and board.

Mr. Choo Wai Lim says: "The success in the implementation of this project was due to the good synergy between the two teams. There was good communication and a strong relationship that was maintained throughout the project. The commitment displayed by both the teams was also one of the reasons that the project went live ahead of schedule. Our successful relationship with SAS has been positive and rewarding, and we expect this to continue in the future."

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