Presentation of Business Banker Software - Pub Solutions

guideflannelServers

Dec 4, 2013 (3 years and 8 months ago)

83 views

Business Banker

By

Crédit International & Financier Experts Conseils Inc.

International Credit & Financial Consultants Inc.

Needs & opportunities

SME risk control

Approval

Monitoring

Early warning signals

Basel II regulations

BRR

FRR

Database PD, LGD and EL

Making SME loans profitable

Standardization

Reduce operation cost

Decrease loan origination processing time

Improve efficiency for monitoring.


Business Banker:

Integration

Easy to customize to the bank’s needs

User friendly

Rating and scoring

Database building: BRR, FRR, PD, LGD, EAD & EL

Basel II compliance & adopting best practice.

Existing Products

Current situation

Multiple systems glued together by manual and paper
processes:

Client profile

Credit setup

Risk and ratios

Securities preparation

Monitoring payment

Loan systems

No link to PD, LGD, EL.

How can Business Banker help?

Risk control

Create efficient work flows by adopting ergonomics
and
risk management best practices

Digitize
entire

credit underwriting process and risk
management process, enabling data mining

Include Monitoring and Early Warning Signal
systems

How can Business Banker help?

Business Banker incorporates Basel II requirements:

BRR and FRR

Include industry, related parties, group exposure,
financial documentation

Facility risk : Term structure, types of loans, security,
legal documentation

Database building for PD, LGD, EAD and EL

How can Business Banker help?

Business Banker standardizes credit risk management
in order to reduce cost and increase data reliability:

Integrates all elements of credit risk management :

Client profile,

Credit facilities,

Analysis of risk and profitability,

BRR and FRR

Application forms,

BRR monitoring, covenants and Early warning signals

FRR monitoring

Reporting system

Data collection (PD, LGD, EAD, EL)

How can Business Banker help?

Automatic Credit Request Preparation And Document
(Security, Letter, etc.)

Saves 50%
-
75% of time, reduce delays and ensures
data integrity and increase SME portfolio more
profitable.

Building Business Banker in stages

First stage

Optimize Bank’s work flows using ergonomics and best practices

Customize Business Banker to digitize the optimized processes

Second stage

Work with the Bank to design a borrower rating system that is both
rigorous in risk analysis and pro business growth

Third stage

Work with the Bank to “data mine” historical loss data

Use statistical methods to determine required provisions and proper
risk pricing

CIF Risk Rating System

CIF has successfully implemented this rating system
in Asia, North Africa, West Africa and Caribbean
region.

Two pronged approach


BRR and FRR

Separates borrower risk from facility risk as recommend by
international best practices

Classifies credit more distinctly.

Enables more relevant pricing.

Creates more effective monitoring and early warning system.

Enables feedback into the whole processes by identifys failures and
success.

Creates a data
-
base.


Benefits

Upgrades risk management processes.

Reduction in bad debt/bankruptcy/claims/fraud

Increase in approval rates or market share in areas
such as secured loans, where low delinquency presents
expansion opportunities.

Increased profitability.

Benefits

Increased operational efficiency (e.g., to better
manage workflow in an adjudication environment)

Cost savings or faster turnaround through automation
of adjudication using Business Banker.

Better predictive power compared to individual
judgment.

IT is very important but costly

Banks have invested large amounts of money on
costly systems. 20% of budgeted overhead is usually
IT.

Inefficient: The result is multiple systems glued
together by manual and paper processes:

Client profile

Credit setup

Risk and ratios

Securities preparation and or monitoring

Compliance monitoring

Loan systems

IT is very important but costly

This has resulted in expensive, inefficient systems
that do not completely fill the needs.

In a more normalized business environment the
advantages are greater than the cost of the IT system.
Even with high costs and inefficiency, investment is
considered mandatory and pays for itself.


Origins of Business Banker


Hired to develop a fully integrated solution for SME
lending by Royal Bank of Canada .


The end product is Business Banker.


45,000 Man
-
Hours spanning 3 years, capturing best
practice methods and processes went into the
development of Business Banker.



Risk

Loan Origination



CRM

Client

Profile




Loan

Facilities






Document






Risk






Compliance



Traditional Loan Origination

Business Banker

Instant Access of information, Integration

Business Banker Automation

Client

Profile

Credit &

Facilities

Data
Collection
(PD, EAD
& LGD)

Creates
Reports

Prepares
Documents


Set
-
up
Covenants
& EWS

Risk
analysis &
profitability

Automatic Credit
Request Preparation
And Document
(Security, Letter, etc.)

Save 50%
-
75%

of Time and Reduces Delays.

Increases Efficiency and Ensures Data Integrity


Client Profile

Multiple SIC Code

Link

Owner Info

Set Up Facilities

Analyze Financial and Risk

Cash (financial)

calculation

Borrower Risk Rating (BRR)

BRR
: Automatically
Calculated based on CIF
CAMP

model :
Cash,
Administration,
Market and Production.

Other models can be
implemented

Facility Risk rating (FRR)


Following collateral set up,
FRR

is
automatically calculated. It is
specific to each credit facility

Probability of default (PD)

Business Banker adjusts monthly the

PD
based on data
-
base. This ensures
accuracy of the probability of default
for every BRR
.

Loss Given Default (LGD)


Business Banker adjusts monthly the
LGD

based on data
-
base. This ensures
accuracy of the Loss Given Default for
every FRR

Expected Losses (EL)

Based on PD and LGD, Business Banker provides with a matrices
overview of Expected Losses. By clicking on any figure of EL,
PD, LGD, BRR and FRR we will obtain the portfolio details for
each EL, PD, LGD, BRR and FRR.

Automatic Credit Prep

Automatic

Changes

Highlighted

Multi
-
lingual

Capability

Account officer

comments,

risk analysis,

risk

identification

and mitigating

factors.

Automatic Compliance Monitoring

Step 2

Input


Financial



Step 3

Input Other

Non
-
financial


Automatic

Breach and

Early

Warning Systems

Detection


Instant Information Access


Step 1

Receive Document

and data


Events (instant access)

Pricing Models

Business Banker Enterprise System

50 Users Accounts

High Performance and High Availability

Upfront Payment

Business Banker Discovery System

10 Users Accounts

Entry Level System

Scalable to Enterprise System

Upfront Payment

Pricing Models

Business Banker Service Level Agreement

50 Users Accounts

Fault Tolerant Environment

Power, Hardware, Software Applications and Support Staff

Monthly Payment

Why Business Banker

One integrated information system


Reduce operation cost and increase data reliability and accuracy

Decreases loan origination processing time


Improved marketing (more time to sell, less time to process)

Improves borrower information & early warning
system and allows efficient credit rating analysis


Reduce bad debt and loan losses, increase profits

Why Business Banker

Local support and customization


Responsive to localization needs


Responsive service

Backed by leaders in processes engineering,
application development and implementation


We can go beyond the software and help you on the business side and
infrastructure side

Architecture

Business Layer

(C++, VB, XML, COM+)

Database

Layer

(MS SQL 2000, Oracle, DB2
)

Security
*

(SSL, PKI)

Middleware
*

(Host Integration Server, BIZTalk, MQ Series)

Presentation Layer

(ASP, VB Script, Java Script, XML/XSLT)

Application :


ASP, VB Script, Java Script, XML/XSLT, C++, VB, XML, COM+

Hardware :


Production System


2 HP ProLiant ML350 G4p Servers

Backup System
-

2 HP ProLiant ML350 G4p Servers

WAS Server:


Microsoft IIS

Database:


Microsoft SQL Server 2005

VPN:


Microsoft ISA Server

Business Banker System Details

Conclusions

Information Technology:


Market requirement
-

Prepare for regulatory

Unknown future regulatory environment

The potential for major changes in banking in The Philippines


Profitable
-
pays for itself

Reduces potential defaults

Increases staff efficiency
-
reduces number of staff


Growth efficiency

Allows for more SME loans [revenues] using assets

Reduces time consuming messes