New IBM Cognos Analytic Software Offers Banks Accurate Risk Insights

Cognos, an IBM company and a player in the business intelligence and performance management space, recently unveiled new analytic software designed to provide retail banks with complete access to accurate, timely and transparent credit risk information across their loan portfolios.

While risk management is a key component of most banks, in many cases, critical risk information is siloed and locked up in disparate data sources, making it difficult for banks to gain a 360 degree view of enterprise risk information in order to properly forecast risk exposure and monitor the day-to-day performance of current loan portfolios.

IBM Cognos 8 Banking Risk Performance - Credit Risk is a packaged business intelligence (BI) application that gives bank executives and risk managers an immediate, up-to-date and comprehensive view of their credit portfolio across products, geographies and business units. Built on an open, services-oriented architecture platform, the new solution plugs into an organisation’s existing technology environment, letting users easily tap into their credit risk data housed in financial, core lending and other administrative systems to gain an accurate, up-to-date understanding of loan performance and its current and long-term effect on profitability.

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Leveraging the IBM Banking Data Warehouse, or the bank’s existing credit risk warehouse, the new analytics application offers users a single, standardised source of enterprise-wide credit risk information from which pre-built dashboards and packaged reports can provide instant visibility into five key analytic areas:

* Originations - to assess the volume and characteristics of new loan originations, such as credit scores and loan-to-value calculations across the portfolio

* Front-end Performance - to better gauge delinquencies, 2+ delinquencies, delinquency roll-rates, and vintage information

* Back-end Performance - to quantify gross and net charge-offs, repossessions, foreclosures, and bankruptcies

* Financial Oversight and Profitability - to measure risk-adjusted return on capital (RAROC), net interest margin, and forecast vs actual comparisons for metrics including receivables, delinquencies, and charge-offs

* Basel II - to facilitate compliance reporting on key Basel II metrics such as Probability of Default, Loss Given Default, Expected Loss, Exposure at Default, and Capital Ratios

Customers can also capitalise on the application’s underlying IBM Cognos 8 platform to extend their information insights using IBM Cognos’ spectrum of performance management capabilities - including analysis, scorecarding, and multi-dimensional planning - to drive greater business value.

“On-demand risk management is predicated on ensuring executives and managers are making the right decisions that are properly framed within the context of current and accurate risk metrics, such as risk concentrations and exposures,” said Laurence Trigwell, associate vice-president of financial services at Cognos. “IBM Cognos 8 Banking Risk Performance - Credit Risk can arm executives and risk managers with the immediate insights they need to assess and monitor critical risk factors, adjust loan portfolios appropriately and ensure healthy, profitable lending operations.”