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Risk Advanced Analytics

We combine advanced tools and techniques with expertise in strategy formulation and organizational transformation to help clients to improve performance, increase profits, accelerate growth, and optimize their risk exposures.

We are at the forefront of helping organizations use advanced analytics to transform risk management. Organizations are making big investments to harness information that has been trapped in business units and functional "silos," as well as new types of information from a wide variety of external sources.

They are also using advanced tools and techniques to build better models with greater predictive power. Maximizing the value from these investments isn't just about the data and models—success requires rethinking and fine-tuning strategies and changing culture and processes.

Our technical expertise

We've made significant investments to increase our capabilities in the technical side of risk advanced analytics:

  • more than 120 professionals who specialize in serving clients on risk advanced analytics
  • close partnerships with companies that are leveraging new sources of information and approaches to provide the right products and services at the right time
  • proprietary knowledge and assets, including digital credit assessment, qualitative credit assessment, sentiment analysis, and quantitative commodity-price scenario analysis

What makes us distinctive

Top-notch technical capabilities are necessary but not sufficient. Organizations need to deliver value to their customers and create sustainable sources of competitive advantage. Key to the value we bring is our deep understanding of our clients, the industries in which they operate, and how to make change happen—we help our clients turn the promise of risk advanced analytics into impact.

We help our clients get "quants," business-unit personnel, senior executives, and the board aligned on what's important and how to capitalize on it. Our ability to combine deep capabilities in risk advanced analytics with expertise in strategy and organizational transformation makes our approach unique and powerful. We know that merely solving the problem at hand isn't enough, and so we work closely with key employees at all levels to build their core capabilities and refine processes.

Case example

We helped a banking client turn around its small-business unit by using improved credit models that required collecting much less information, produced a higher rate of "real time" credit decisions, and vastly simplified its product line. The former money-losing unit is now a top profit contributor.

By incorporating new sources of information and using advanced modeling tools and techniques, we help clients produce models with significantly higher predictive power. Combining a better credit model with changes in strategy and organizational approach can produce a huge improvement in results.

How we help clients

Credit risk modeling

Advanced credit-risk analytics enable institutions to improve underwriting decisions and increase revenues while reducing risk costs. We work across all asset classes, credit risk models, and the entire credit life cycle, including profit maximization, portfolio management, and collections and loss mitigation (including banks, telcos, and government agencies).

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 profit and loss and balance sheet—all of which can inform an action plan to mitigate risks and swiftly capture opportunities.

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.

Liquidity risk modeling

We support clients in analyzing and understanding characteristics of their balance sheet (for example, different types of deposits and mortgages with prepayment 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.

Insurance

We assist clients in applying big data and advanced analytics capabilities to key issues facing insurers, including underwriting and pricing. In doing so, we can help optimize new customer acquisition and maximize economic value from policies to ensure the claims are settled fairly for both customers and shareholders.

Featured experts

Tobias Baer

Partner, Taipei

Kevin Buehler

Senior Partner, New York

Mikael Hagstroem

Partner, Charlotte

Marco Piccitto

Senior Partner, Milan

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