Basel II

Meet the Regulatory Requirements of Basel II with Advanced Analytics Capabilities

Basel II promotes the safety and stability of the global financial system and results in greater quality of and accuracy in obtaining risk information. Basel II requires your institution to identify, measure, validate and report on the risk you assume everyday. For some this will mean a costly and difficult regulatory headache. For Insightful Financial Solutions customers it means reliable, rigorous results with clear reporting and transparent audit trails.

Insightful will help you meet Basel II requirements by providing:

• Internal and external data integration
• A transparent analytic environment
• High-level modeling process flow
• A detailed set of pre-programmed risk models
• A front-office reporting interface
• A complete risk aggregation solution

Figure 1. Out-of-the-box graphics and process flow diagrams provide clear communication of risk analytics and results for executives and regulators. Shown here are Credit Risk, Market Risk and Fixed Income Risk Workflows. Click to enlarge.

Insightful Financial Solutions for Basel II will allow you to meet your deadlines in time and within budget. Our open architecture and extensible sets of functions make it easy to tailor your implementation to meet your institution’s particular needs while seamlessly integrating with your existing IT infrastructure. Insightful's unique visual programming environment enhances communication with your regulators for auditing purposes and provides the transparency required by Basel II.

Pillar I and Pillar II

The challenges facing institutions to comply with Pillar I of the accord have everything to do with data management and system implementation / integration. In order to calculate the Economic Capital Requirement for the entire institution all data silos must be identified and integrated without placing undue burden upon IT resources. Insightful Financial Solutions will provide:

• Data Integration
• Comprehensive Modeling Libraries
• Credit Risk
• Market Risk
• Operational Risk
• Sets of Pre-Programmed Risk Models
• Pre-Built Risk Type Workflows
• Risk Aggregation

Pillar II

Compliance with Pillar II requirements lies in the Supervisory Review Process and critical to this process is comprehensive visual reporting. A bank’s ability to demonstrate that the Economic Capital Requirement that they calculated with the models created in Pillar I are supported and validated through Stress Testing is made easier through the use of graphic reports that can be easily understood and explained within the context of the institution’s documented process. Insightful Financial Solutions provide:

• A transparent Analytic Environment
• High-level Modeling Process Flows
• A front-office Risk Reporting Interface
• On-Demand Graphic Reporting for all audiences

Pillar III

In the final part of the accord comes the moment when the institution must be able to demonstrate that it has followed its declared process from Pillar II and that its Economic Capital Requirement was accurately calculated through that process. Insightful Financial Solutions customers will be able to do this immediately upon completion of Pillar II as our graphical process flows and reporting create audit trails as the models are run and the reports are generated.