Creating bespoke forecasting and stress parameters to current and projected balance sheets and cash flows
The KnowCo Asset and Liability Management system is an easy to implement solution which allows our clients to obtain a greater understanding of their risk profiles because of the ability to generate dynamic forecasts using quality models. With accurate processes for measuring the balance sheet risk, K-ALM allows a better understanding of how P&L changes over time and how the risk-reward profile may change.
Accurate and Detailed Data Capture
K-ALM (asset and liability management) software allows a user to create and define bespoke forecasting and stress parameters that will compute liquidity and capital requirements, and the effects of interest rate stresses and credit impairment on earnings, under a potentially unlimited number of scenarios. It enables users to apply a wide range of tests to their current and projected balance sheet and cash flows, including the behavioural modelling of cash flows with no contractual maturity.
With K-ALM, our clients benefit from moving away from convoluted, opaque spreadsheets and workbooks towards an alternative software solution.
Incorporating a new ICAAP module
The ICAAP Manager pulls together all of the outputs from the balance sheet forecasting scenarios in the ALM system, and then allows the user to incorporate their own projections of income and expense, op risk requirements, market risk requirements, and other firm-and scenario-specific data, to produce a Capital Dashboard that allows you to monitor your Capital Surplus/Deficit over your business planning horizon.
Delivering Answers to Key Questions to Obtain a Deeper Understanding
Which of my businesses are making/losing money over time in this scenario?
What are their respective Returns on Capital?
How much Capital will I need in x years’ time?
What effect would margin compression have on my Net Income and Capital?
What happens to my Earnings if interest rates rise steeply in the short term?
What is the effect on Liquidity, Capital and Earnings if I introduce this new product (or transaction)?
How should I price this new product?