Benefits of our Credit Risk software solution

Basel IV has changed the way banks need to address the impact of credit risk. To comply with regulatory requirements such as Basel IV you’ll need to take a holistic view, and our software solution and services enable just that.

OneSumX Credit Risk calculates credit, debt and funding valuation adjustment. It takes an integrated approach to explore the correlation between credit, market and behavioral risk. It also identifies and estimates the degree of systemic and concentration risk based on counterparty risk and credit exposure analysis.

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Avoid major financial losses

Financial institutions are heavily exposed to credit risk and thus failure to manage counterparty risk will result in major losses. Our solution provides clear insight into your profitability, performance and risk analysis.
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Link key business stakeholders

Our integrated credit and counterparty risk analysis links and supports the front office management, back office analytics, treasury office, asset and liability managers, regulatory compliance, risk managers, and the board of directors.
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Confidence of markets and the regulators

OneSumX gives firms a safe and robust solution that's optimized to display steady profitability with minimal losses and results. Plus it ensures compliance with all aspects of credit risk included in the Basel IV regulation.

OneSumX Credit Risk software features

Institutions must be able to identify and model underlying parameters of credit and counterparty risk, together with their integration with other financial risks. They should be able to estimate and report the current and future possible impacts of credit and counterparty risk. Specifically when it comes to value and liquidity measurement and risks under both normal and stressed conditions. OneSumX Credit Risk helps to manage and solve these requirements.

  • Counterparty credit worthiness

    Firms need to be able to identify and set the parameters related to credit worthiness of a counterparty. They also need to ensure that risk against credit losses is minimized. OneSumX Credit Risk enables both. It does this by:
    • Identifying credit ratings
    • Giving the probability of default and migrations (transition) matrices (MMs)
    • Defining descriptive characteristics, such as seniorities and regions
    • Considering the hierarchy among counterparties and models behavior characteristics, such as recovery rates
    • Defining and/or considering the market driven credit spreads.

  • Credit exposure static and dynamic evolution

    • Calculates current and expected gross and net credit exposures
    • Computes the degree of exposures in both default (EAD) and non-default cases
    • Estimates potential future and effective credit exposures at more than one future date
    • Identifies and considers volatilities and adjustments of credit exposures
    • Tracks the evolution of credit exposures under static and dynamic credit and market conditions.

  • Risk management

    • Calculates both expected and unexpected losses
    • Applies stress testing scenarios in all credit and counterparty risk parameters to measure and manage credit and counterparty risks
    • Considers deterministic and/or stochastic scenarios
    • Applies VaR risk measurements
    • Considers wrong way risk and both specific and general sensitivities of counterparties
    • Hedging strategies and credit enhancements are applied when needed

  • Contract-centric approach and dynamic simulation

    Each financial instrument is linked to a specific counterparty, together with its related market conditions and behavior characteristics. Credit exposures can also be estimated considering both static analysis and dynamic simulation.

  • Stress testing

    Stress testing is a crucial element of financial analysis. Institutions can employ it to identify their strength and robustness against expected and unexpected performances of risk factors. It also looks at related losses that arise usually during periods of financial crisis.

    Institutions must be able to define deterministic scenarios for stressing those risk factors. These stresses can range from simple to complicated rule-based shocks applied to single and/or multiple and integrated risk factors.

    In addition, the parameters of algorithms can be included for simulating the stochastic evolution of these factors named stress VaR. The impact of stress testing in Capital, Liquidity, Value and Income must also be calculated and reported accordingly.

    Thanks to our dynamic analysis the evolution of risk factors can be simulated under consideration of the stress scenarios. The results are then used in the design of strategies. It provides maximum profitability with minimum expected or unexpected losses.

Expert insights and related solutions

  • Risk Management white paper
    Article
    ComplianceFinanceSeptember 12, 2022
    A better approach to financial risk management
    By: Jeroen Van Doorsselaere
    There is a better way to manage risk. It begins with a holistic conceptual framework, including an enterprise-wide view of your risk profile that encompasses regulatory compliance and business performance.
    Learn More
  • Liquidity Risk Management
    Solution Detail
    OneSumX Liquidity Risk Management
    A solution that combines risk management, stress testing, and regulatory reporting into a platform that monitors, manages and reports liquidity risk. The solution allows organizations to manage liquidity coverage ratio and data granularity.
    Learn More
Downloads
Browse all OneSumX FRR downloads

Credit-Risk-Solution-Primer
Credit Risk Solution Primer

Credit-Scoring-Product-Sheet
Credit Scoring Product Sheet

OneSumX IFRS Stress Testing Solution Primer
Stress Testing Solution Primer

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