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Modeling, Reporting, Stress Testing For All of Your Regulatory Requirements
Whether your institution must comply with Basel II, Basel III, Dodd Frank or any other regulatory requirements; Scorto Products empower our customers to attain compliance with regional requirements for retail and commercial credit risk management while improving reserve capital and credit portfolio management efficiency. With Scorto, meeting governmental demands is a pain-free process and inexpensive enterprise!
Scorto solution for Basel II and Dodd-Frank covers all aspects of New Capital Accord compatibility and Risk-Management Demands:
- Rating, Scoring and Analytics
Whether you need to develop rating models in-house based on historical data or you require experienced analysts to create rating models for all products in your retail portfolio. Whatever your strategy is, Scorto has a sensible platform to suit your needs. Scorto offers a rating and segmentation model development tool (Scorto Model Maestro) with built-in methodology that will tremendously speed-up your scorecards and PD, LGD or EAD model development for different credit products from personal loans to SME loans and for different segments of your retail credit portfolio. Rating and scoring model development services from Scorto will cover your needs completely if you don’t plan to do everything in-house.
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- Monitoring and Reporting
Visual, drag-n-drop-managed reporting with pre-defined Basel II and/or Dodd-Frank reports allows monitoring the quality and structure of the credit portfolio, as well as the adequacy of the risk-management models used, stability of PD-buckets and changes in reserve capital requirements. And even more, with The Scorto Supervisor reporting and monitoring tool you can add your custom portfolio management reports, get automatic alerts and automatically update whole branches of portfolio reports. Scorto Supervisor is the only tool you will need to completely satisfy all Dodd-Frank Title X and Basel II reporting requirements!
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Sensible combination of methodology, rating tools, portfolio monitoring and consulting to address your regulatory requirement needs.
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- Segmentation and Decisioning
Visual change of pre-defined risk strategies, Basel II risk parameter calculation flows for sub-portfolios, easy to change PD, EAD, LGD models by business users, automation of decisions, fast batch processing, borrowers rating on account, customer or sub-portfolio level as well as easy visual rules for risk-based portfolio segmentations, different loan portfolio management rules and PD, EAD, LGD calculations for different risk segments.
- Stress Testing
Special software for credit portfolios stress-testing and monitoring – Scorto Accord. The software offers convenient business-user oriented stress-testing framework with a number of pre-defined stress testing scenarios and intuitive drag-and-drop interface for easy scenario adjustment and customization. With Scorto Accord you get transparent (and compliant with both Basel II and Dodd-Frank demands) stress testing methodology to satisfy the regulator’s requirements.
- Data Warehouse Optimized for Basel II
Special internal data warehouse specifically designed to store risk calculations correctly for sub-portfolios and other Basel II related data. Unique innovation in data access and storage offers you the fastest processing on the market, so you can process your portfolios on account level during office hours however large they may be.
- Basel II Consulting and Documentation
Comprehensive review and analysis of your particular business situation and information flows, followed by knowledge transfer, advice and assistance in Basel II solution implementation, including preparation of detailed documentation required for external and internal audit of Basel II compatibility.
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Why Basel II?
- The New Basel Capital Accord (Basel II) is the international standard that banking regulators can use when creating regulations about how much capital banks need to put aside to guard against the types of financial and operational risks banks face. To be compliant with Basel II any bank needs to implement credit rating techniques that represent risk profile of their particular credit portfolios. The Internal Rating Based Approach of Basel II allows banks to use their own models for estimation of risk parameters. There are 3 key Basel II risk parameters:
- The likelihood of a default by the counterparty – probability of default (PD);
- The absolute losses value under default – exposure at default (EAD);
- The share of the losses under the counterparty's default – loss given default (LGD).
- The risk parameters are used to calculate capital adequacy, to manage lending business and to control credit risks on portfolio and sub-portfolio level.
- To be compliant with Basel II many lending organizations are required to change significantly their business processes, data collection and risk management.
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What is the Dodd-Frank Act?
- The new Dodd-Frank Act is the set of strategies, rules and regulations that the U.S. Congress has enacted to curb the possibility of another financial crisis for reasons similar to those that caused the recession of 2009-2010. This set of laws requires banks and lending institutions to adhere to rules regarding credit risk management, as well as governance of lending policies and credit portfolios. While most of the rules and laws (including those which are undocumented as of yet) pertain to large lending and investment institutions, organizations with assets under $10 Billion are still subject to the Act’s requirements. To be compliant with Dodd-Frank any bank needs to implement reporting and risk management techniques that represent risk profile of their particular credit portfolios. Scorto tools allow all banks to meet the following requirements:
- TILA – With Scorto Loan Decision, you will have the ability to manage documents effectively to ensure compliance with all TILA requirements;
- Capital Requirements – The ability to meet, monitor and maintain Basel capital standards as highlighted above;
- Title X – Scorto Supervisor and various other Scorto suites come pre-packaged with all of the reporting you will need to be completely compliant with the requirements of Title X of the Dodd-Frank Act.
Scorto has been studying the Dodd-Frank Act carefully since it was signed into law. While there are certainly many aspects which are yet to be defined, Scorto has been working with policy experts and political analysts to stay ahead of the curve and ensure that our clients are well prepared for the eventualities that are bound to occur. Whether your institution is "Systemically Important" or a Credit Union, Scorto has the right solution for you to comfortably and securely be prepared for the demands that this new legislation will have on your organization.
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On demand or automatic daily/weekly/monthly/quarterly calculations of all risk factors for all subportfolios.
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PD, LGD, EAD models based on your portfolio and take into consideration your business flow.
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For every credit product for every region for every sub-portfolio – automatic reports generation with alerts.
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