Policies and Model Manager – Risk Assesment Tool

The policies and model manager is an analytical environment focused on covering every inch of the risk decision model´s life cycle, allowing the analysis of automated strategies (score + rules) and of the impact of manual decisions (allocation of responsibilities). Automated production through the Risk Assessment Tool reduces the time to market of new strategies:

• Rating models monitoring: predictive capacity, portfolio stability, sub-populations analysis, etc.
• Approach focused on metadata (adapted to each Entity´s data model, which helps and speeds up implementation).
• Policy on Delegated Authority.
• Champion/Challenger strategies.
• Cut-off points, profitability and manual decisions analysis.

Campaign Manager

Campaign manager enables the assessment of a target population by integrating risk models and policies in order to obtain a limit structure that will allow launching the campaign to clients and non-clients:

• Automated environment to reduce cost and time.
• Parametrical and user-friendly environment.

Alerts and Portfolio Manager

The alerts manager allows you to define and monitor different level alerts (portfolio, customer, product, etc.) for key risk indicators (volume, late payments, expected loss, capital, RAROC, etc.) incorporated into the system’s different reporting modules, including Risk Monitoring and integrated Risk Management and Appetite (RAS) modules.

Likewise, the portfolio manager enables proactive customer management through business strategies and impairment control, prioritizing recovery measures and automatically identifying other pending actions with immediate feedback to Corporate Services.

Risk Parameters

The MIR data model contatins all attributes necessary to estimate risk parameters (PD, LGD, CCF), enabling its exploitation using data mining tools. MIR also:

• Implements a risk parameters back test and stress test.
• Includes the necessary incremental information for other system functionalities, which generates synergies related to ETL re-use, audit processes, etc.

Regulatory Compliance

MIR covers the needs relating to provisions and capital calculation and regulatory reporting (Basel Pillars I, II and III) and provisions according to IFRS 9 standards and country-specific regulatory requirements. Using this platform supports the consistency of the information generated as well as the emergence of synergies among the different areas involved:

• Adapts to each country´s legislation.
• Supports Standard and IRB capital calculation in Credit Risk and Standard capital calculation in Market Risk.
• Supports the calculation of provisions through practical expedients and internal models in line with IFRS 9 regulations and country-specific regulatory requirements.
• Audits at the lowest granularity level.
• Reconciliation with accounting through specific reports.
• Capital and provisions simulation and stress testing capabilities to meet the ICAAP capital requirements and IFRS 9 provisions requirements.

IFRS 9 Compliance

MIR provides an integrated IFRS 9 compliance solution enabling:

• Transaction sorting and parameter allocation:
• Parameterization and execution of indication models for classification in stages (model manager).
• Treatment of refinancings.
• Segmentation for individual analysis.
• Parameter assignment.
• Calculation of impairment loss allowances:
• Treatment of collateral (haircuts).
• Calculation of generic provisions: internal models and practical solutions.
• Calculation of provisions through individual assessment.
• Reports and scenarios:
• Automated generation of the new reports on provisions (for regulatory and management purposes).
• Forward looking scenario simulation and impact analysis.
• Accounting integration:
• Accounting interface generation.

RAROC and Pricing

The RAROC functionality allows entities to measure different risk-adjusted profitability levels (historic and forward-looking) through the PRICING driver, adjusting pricing policies to align them with their target profitability levels:

• Bottom-up approach.
• Analysis performed over different aggregation levels: contract, customer, bureau, portfolio, etc.
• Possibility of using regulatory or management parameters.
• Integrated with the regulatory calculation drivers.

Stress test and Capital and provisions planning

MIR allows you to create capital planning and provisions stress scenarios. This makes it possible to manage internal and regulatory solvency targets and provision levels for both base and stress scenarios.

• Top-down simulation of standard portfolio and bottom-up simulation of IRP portfolios.
• Interface designed to provide an intuitive way of creating new scenarios.
• Delinquency entries, provision needs and evolution of results estimation.

Scorecard

MIR includes a complete and customizable risk scorecard which, via an OLAP driver, enables analysis at different aggregation levels as well as the creation of multidimensional reports.

• Integrated Risk Management and Appetite (RAS)
• Summarized information.
• Information focused on decision making.
• Ease of analysis.
• Operational
• Detailed information.
• Information focused on the diagnosis.
• Multidimensional Analysis.
• Processes
• Origination reports: processing times
• Monitoring reports: alerts, delinquency, etc.
• Recoveries reports: managed portfolio, full cycle view, etc.