Benefits
…of using RASBOX
Portfolio management techniques applied to the financial risks inherent in, for example, credit, investment, and trading portfolios, have evolved to a very high degree of effectiveness. But risk managers have not yet found a way of transporting these techniques to non-financial risks.
Now they can. RASBOX Enterprise is the first-ever solution that provides an accurate and comprehensive portfolio view of non-financial risks.
Why is it important?
Because huge investments were made in research and technology without a practical, immediately usable outcome. The level o complexity achieved in risk reporting for financial industry is keeping it extremely busy without adding much business value.
RASBOX is best positioned to change that…
Non Financial Risks are Emerging as an Extremely Serious Threat
In the recent past, most notably during the financial crisis of 2007/8, financial institutions of all sizes around the globe suffered material, sometimes catastrophic unexpected losses. These were invariably due to their inability to effectively identify, quantify, aggregate and report their internal exposures to non-financial risks. In many instances, the result was extreme accumulations of unidentified and unreported exposures to non-financial risks that eventually turned into losses. In contrast, external exposures to financial risks have intrinsic monetary value that can be readily identified and quantified in natural currency, aggregated and reported.
In short, a financial institution’s amount of exposure to external financial risks is typically known whereas its amount of exposure to internal non-financial risks is typically unknown.
Real-Time means Real-Time!
While the current risk management practices are based on subjective assessments of past activities and signs of potential trouble, required to be repeated annually or every six months, combined with mathematical and statistical models applied on historic financial data in the hope to obtain some relevant risk information, not much has been achieved in respect to preventing catastrophic losses.
RASBOX Enterprise offers an improved approach, based on directly quantifying the risk accepted by the organization with each and every transaction, dynamically, right as it happens.
Easier, Measurable Regulatory Compliance
RASBOX Enterprise provides the capability of automatically calculating risk exposure accumulation levels as transactions are being registered in the organization’s systems.
Reports can be automated and will provide an aggregated, 360 degrees view over the organization’s risk exposures in terms of total risk, risk mitigation effectiveness and residual risk.
Organizations can engage in more advanced discussions with the regulators, influencing future regulatory requirements’ effectiveness based on factual evidence.
BCBS 239, IFRS 9, ISO 9001/2015 Alignment
Risk reporting requirements became more demanding under various standards and practices. While most requirements are quite detailed in terms of what is to be done, they fall short when it comes to describing how the result is to be achieved.
This is where RASBOX Enterprise comes in, offering a detailed, effective and auditable method for quantifying risk exposures in alignment with the most recent requirements.
Easy Correlation with Monetary Values
Being able to directly determine risk exposures in Risk Units (RUs), calculating the value of an RU becomes possible, giving the organization a more specific idea about the monetary value of their total possible loss, and their actual, mitigated possible loss.
This will provide CFOs and COOs with a new, risk sensitive and forward looking reference system for more realistically gauging the organization’s financial performance.
Value to Shareholders
Organizations managing their risk in a measurable way are better positioned to better compete in the market and realistically report their performance.
The forward looking perspective of the risk exposures accumulated through past transactions allows organizations to properly budget and plan for potential losses, withough having to store excessive monetary reserves or having to cover for unexpectedly high losses.
Thus, the calculation of truly economic profit is possible and therefore the profits become more reliable and less susceptible to become losses.
Finally, Business Value!
Especially after the 2008 financial crisis, risk management has developed predominantly into a costly compliance activity with very little value to the business. Avoiding non-compliance fines is hardly of any real benefit to the business. RiskBox Enterprise provides organizations with actionable, real-time exposure information as well as with suggestions for further strengtening mitigation initiatives.
Organizations can monitor their risk appetite thresholds, discontinue the sale of too risky products before they become a threat and prioritize risk mitigation actions based on their effectiveness, cost, implementation time etc.
Get in touch now...
Risk exposures accumulate as you read this, why not let us help you quantify them?
Write to us at: info@m-asterisk.com
...or fill in the form to the right.
You can also reach us by phone:
+4 0722 301496