The recent failure of several prominent banks, highlighted the need for financial services institutions to better anticipate and manage risk. To address these challenges, Oracle today launched new cloud-native services that can help banks strengthen their finance and risk management processes to reflect their target risk appetite and limit exposure.
The new finance and risk management services include:
- Oracle Financial Services Profitability and Balance Sheet Management Cloud Services
With strong headwinds threatening current and future performance, profitability, and risk profiles, banks need more flexible and robust analytics to measure and forecast performance and risk. With built-in analytics and AI, Oracle Financial Services Profitability and Balance Sheet Management Cloud Services includes applications for Profitability Management and Customer Insights, Funds Transfer Pricing, Asset Liability Management, and Balance Sheet Planning and Optimization to give banks deeper insights into profitability and interest rate risk.
- Oracle Financial Services Asset Liability Management Cloud Service
Information silos and fractured data flows frequently prevent banks from accurately managing balance sheet risk and meeting business and regulatory requirements. Oracle Financial Services Asset Liability Management Cloud Service empowers banks with full balance sheet and income statement modeling that can model any financial instrument in any currency down to the transaction level via a high-performance, scalable, common cash flow engine. With the service, banks gain a clear view of profitability, earnings, and overall exposure of the balance sheet to actively incorporate risk into decision-making and promote a transparent risk management culture.
- Oracle Financial Services Funds Transfer Pricing Cloud Service
Banks can utilize funds transfer pricing to answer complex profitability questions, but many struggle to accurately assess profit across a myriad of dimensions. Oracle Financial Services Funds Transfer Pricing Cloud Service enables banks to determine the spread earned on assets and liabilities, and the spread earned as a result of interest rate exposure for each customer account.
- Oracle Financial Services Profitability Management Cloud Service
Banks face mounting margin pressure from rising interest rates, economic turbulence, and complex regulatory and compliance requirements. Oracle Financial Services Profitability Management Cloud Service provides financial institutions an enterprise-wide view of profitability drivers and risk-adjusted performance across multiple dimensions including product, business unit, legal entity, and channel. Together, with the solution’s sustainable, repeatable, and integrated performance measurement process firms can continually generate fully reconcilable profitability and performance insights to inform any adjusts in strategy that need to be made to minimize risk.
The services are built on the high performance, scalability, security, and compliance of Oracle Cloud Infrastructure (OCI), including OCI Container Engine for Kubernetes and Oracle Autonomous Database. With the most cloud regions available globally, in addition to the most extensive set of distributed cloud options, the services can be deployed based on sovereignty or data residency needs.
The four new services provide banks with highly scalable profitability management and customer analytics, funds transfer pricing, asset liability management, and cashflow forecasting. With these solutions, firms can get better insight into how threats, including changes in interest rates, liquidity, customer behavior, and market rate volatility can impact their business. With this intelligence, they can make more effective, data-driven decisions based on early warning signals, adjust their risk management strategies to avoid crisis, and continually measure risk-adjusted performance.
“Recent events demonstrate that financial institutions have an opportunity and obligation to better use data to understand and manage risk,” said Sonny Singh, executive vice president and general manager of Oracle Financial Services. “With powerful analytics and AI built-into our new cloud solutions, firms can bolster their risk management, economic stress-testing, and scenario analysis capabilities to mitigate exposure and get ahead of the regulatory response that is likely to come from these banking failures.”
With a microservices architecture, robust APIs, and a single, transparent data layer, the cloud services help banks embrace a component-based approach to modernization based on their individual business requirements. The services can run standalone, work seamlessly together, and coexist with existing applications.
“Financial institutions need to look beyond what’s regulated today to factor in behavioural and market-implied scenarios, to protect themselves – and their customers – from catastrophic risk in the future,” said Sid Dash, Chief Researcher at Chartis Research. “With the right tools and a common data foundation that can handle optionality and the behavioural aspects of their business, firms can develop a much more holistic approach to managing both risk and the regulations to come.”