SAS expands lead in credit risk management software

SAS, the leader in business intelligence, has staked a claim as the leader in credit risk software.

More than 20 banks and financial services organisations worldwide selected SAS Credit Risk Management and SAS Credit Scoring for Banking in 2004 to assist with the capital adequacy and risk governance requirements of the New Basel Capital Accord (Basel II).

SAS maintains its leadership in enterprise-wide risk management through continued global investment and dedicated risk practices set up to support Basel II customers at both the regional and local level. Credit risk is a pressing issue for financial institutions due to the regulatory imperatives of Basel II and the desire to improve business practices surrounding credit risk management. Organisations recognise that SAS Credit Risk Management addresses Basel II compliance and beyond.

According to a recent case study on credit risk by GartnerG2: "Rather than deal with a variety of vendors offering point solutions, institutions of all types are seeking vendors that offer an integrated array of risk management components and tools designed to operate together.

"Enterprise architecture that is reusable and standardised - including all systems elements, from database to middleware to financial applications - is essential to sustain consistent risk management practices." (Source: GartnerG2, Lloyds TSB Tackles Credit Risk Within an Enterprise Risk Strategy, GartnerG2 Case Study by Doug McKibben, November 2004)

Says Peyman Mestchian, director of the EMEA risk management practice: "Our customers want to meet their short-term risk compliance needs without compromising their long-term business and technology strategies.

"Organisations are now revisiting their existing systems and looking for a more integrated approach. SAS's ability to link risk governance with risk management provides compelling businesses benefits for managing risk across all areas."

According to him, the latest version of SAS Credit Risk Management touts several enhancements. These include:

* Pre-configured analytics for calculating regulatory capital and the capability to compute economic capital. Organisations can define different calculation methods by asset class and perform all necessary computations in one environment. Users can store preferences based on different regulatory needs.

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* Unique capability to optimise risk mitigants by counter-party.

* Seamless resource integration that allows users to dynamically link models for estimating probabilities of default and loss given default.

* Web-based interface that performs ad hoc analyses, supplies drill-down reports, offers customisable data and publishes regulatory reports.

SAS Risk Dimensions, included in the SAS Credit Risk Management solution portfolio, also offers important new capabilities in its latest version. Organisations will find enhanced functionality for defining counter-parties and handling all types of risk mitigation techniques. A Java-based interface improves client/server experience and delivers integrated user/group security. Also, the solution now sits on top of the SAS Intelligence Platform, an end-to-end framework for creating and sharing enterprise intelligence.

"Basel II requires organisations to measure and manage credit risk at a more granular level than in the past," said Jeff Hasmann, SAS global credit risk strategist.

"This requirement has created an imperative to examine and reengineer credit risk systems with respect to data management, analytics and reporting. SAS offers robust data management technology with advanced analytics and Web-based reporting on a single end-to-end platform."

Increasingly, financial institutions are turning to technology vendors like SAS for help in satisfying new regulatory requirements and improving their business practices. Ensuring consistency in both data and model management is a regulatory mandate and a necessary step in improving credit risk management.

"SAS offers sophisticated functionality that helps institutions to enhance internal controls, measure and manage risk, and provide audit trails for both data management and in-house modelling processes. SAS Credit Risk Management is unique in offering both credit scoring and advanced analytics within one solution," concludes Hasmann.