For analytics to be truly “advanced,” they must do more than simply process large amounts of data using a static set of statistical techniques. We believe advanced analytics should allow organizations to develop nuanced insights into their risk exposure—insights that ultimately inform broader business strategies.
In our work with risk advanced analytics, we create impact through a combination of three elements:
Expertise and proprietary methodologies
We have extensive expertise and a strong track record in applying advanced analytics to risk-related topics across a variety of industries. We deploy field-tested solutions customized to each client, as well as proprietary diagnostic tools and benchmarks that help accelerate execution and impact.
Insights that link model design to business value
Traditional approaches to analytics yield traditional results. Using innovative analytical techniques to tease out insights that are not immediately apparent, we collaborate with clients to build innovative business models and develop market-leading value propositions.
Business-transformation capability building
Our client service goes beyond customized modeling. With our thorough understanding of risk management and business strategy, we help drive organizational change. We offer our clients ongoing support, making long-term capability building in risk analytics a key goal of our work.
How we help clients
Credit risk modeling
Advanced credit-risk analytics enable institutions to improve underwriting decisions and increase revenues while reducing risk costs. Our work helps clients address five strategic imperatives: understanding and adapting to changing consumer behavior, mining the vast amounts of available data, expanding the credit “buy box” without altering risk profile or overall risk appetite, increasing penetration of the customer base, and containing credit risk within the portfolio.
Asset and portfolio modeling
We support clients in the complex tasks of managing and streamlining their balance sheets—enhancing profitability while taking into account conflicting objectives such as reducing capital, minimizing risk, and increasing liquidity.
Comprehensive stress testing
A structured, well-defined stress-testing process connects the “engine room” to the “board room”; it goes beyond cumbersome exercises aimed solely at achieving regulatory compliance, and moves board members and business leaders to action. Our stress-testing capabilities include scenario generation, translation of scenarios into environmental parameters through macroeconomic quantification, and assessment of the impact on the overall market as well as on a client’s P&L and balance sheet—all of which can inform an action plan to mitigate risks and swiftly capture opportunities.
Liquidity risk modeling
We support clients in analyzing and understanding characteristics of their balance sheet (for example, different types of deposits and mortgages with pre-payment rights) both under normal circumstances and under stress. We also help clients refine their funds-transfer pricing based on liquidity-modeling results. We perform liquidity risk modeling at an enterprise-wide level as well as for specific businesses.
Cash-flow-at-risk and commodity modeling
We help clients—particularly in the electric power, oil, natural gas, and basic-materials industries—manage their commodity exposures. We leverage advanced modeling algorithms and our insights into commodity markets to deliver solutions that are transparent and straightforward.