Transforming asset and liability management for a new era of banking

Alliance Bank Malaysia Berhad sees a tenfold improvement in system scalability, availability, uptime and transactions per second with SAS Asset and Liability Management

Navigating market volatility and meeting escalating regulatory standards – all while maintaining a resilient, risk/return optimized balance sheet – is a demanding and critical task. At Alliance Bank Malaysia Berhad, the risk group realized they needed to upgrade their systems to meet these challenges. With data scattered across various sources, timely and reliable insights were challenging to obtain, impacting decision-making. The bank also wanted tighter integration of risk and finance to enable more informed, responsive business decisions.

Recognizing these challenges, Alliance Bank embarked on a transformational growth strategy in 2023 called Acceler8, a four-year roadmap designed to drive sustainable growth. This strategy includes expanding its consumer business and doubling its small and medium-sized enterprise loans by FY2027. To achieve these targets – and ensure ongoing compliance with risk guidelines from Bank Negara Malaysia (the Central Bank of Malaysia) – Alliance Bank decided to enhance its asset and liability management processes. It turned to SAS for its comprehensive analytical, computational and governance capabilities.

SAS Asset and Liability Management transformed Alliance Bank’s operations from a reactive approach to a proactive one. The powerful, cloud-native solution unified complex data streams, accelerated insights and helped the bank achieve the precision it needed to protect stability and growth, even in the face of unexpected challenges.

Regulatory agility drives efficiencies, growth and value

Alliance Bank adopted SAS Asset and Liability Management because of its powerful reporting and analysis features and to gain a sophisticated tool to manage its balance sheet. The system would also help the bank overcome its data challenges, improving data quality and the speed of its reporting, enabling it to transform raw data into useful insights.

“We had data all over the place, so first, we needed a system that could aggregate and integrate the data,” explains Kunalan Pecheadavar, Senior Vice President and Head of Group Market Risk at Alliance Bank. “SAS Asset and Liability Management was able to do that. It provided real-time data extraction and report generation for all users and ensured critical insights were always accessible.”

With this solution, the bank revolutionized its risk management, enabling advanced real-time stress testing and incorporating behavioral models to better predict outcomes. The implementation also included upgrades to hardware, applications and infrastructure and added the latest security measures to Alliance Bank’s systems.

By addressing potential asset and liability management-related regulatory compliance issues in this implementation, Alliance Bank now has a flexible, future-proof approach to meet current compliance requirements and prepare for upcoming regulatory changes.

“Although compliance was the primary driver for this transition, we are pleased that this project also armed us with superior visibility into interest rates and liquidity,” says Jacob Abraham, Group Chief Risk Officer at Alliance Bank. “These improved insights allow us to manage funding more precisely and track analytics more effectively."

Impressive benefits and ROI

With the improved visibility into interest rates and liquidity, Alliance Bank gained more robust daily reporting, advanced depositor concentration tracking, and improved simulations and analyses.

The upgrade has produced a significant return on investment for the bank.

“By implementing SAS Asset and Liability Management, we saw a tenfold improvement in system scalability, availability, uptime and transactions per second,” Abraham says. “And by automating 90% of our ALM-related processes, we increased productivity and accuracy, leading to more than 10% savings in operational expenses, labor costs and production time.”

“SAS Asset and Liability Management streamlined processes by minimizing manual tasks and enhancing data sharing between departments,” Pecheadavar adds. “This delivered annual savings of more than RM1 million [US$236,000].”

The SAS solution allows teams to concentrate on more strategic and impactful work, ensuring resources are used where they add the most value.

Enhanced granularity, transparency and momentum

The integration of advanced stress testing and behavioral models enabled Alliance Bank to stay ahead of regulatory demands while optimizing workflows and resources. However, the project went beyond regulatory compliance to transform their entire risk management approach. It increased granularity and transparency for asset and liability management processes, resulting in more tailored customer products, improved system security and safer bank management.

“The time needed for risk assessment and compliance was reduced to less than a day, and liquidity management is now based on immediate funding needs,” Abraham explains.

Alliance Bank’s Acceler8 strategy has steadily continued its momentum, after the acquisition of 61,000 new-to-bank customers in 1HFY2024, which represents an increase of more than 40% year-on-year.

“SAS Asset and Liability Management has significantly enhanced our ability to proactively identify and manage potential liquidity and rate risks, facilitating better planning,” Abraham concludes. “This project has also empowered innovation, ushering in a new way of thinking that allows us to serve our customers as people – not mere account holders.”