Smart About Risk
 

Development of Systems for Financial Risk Management

We cooperate with our clients when developing of a new system or improving an existing risk management system. The output of our cooperation are specific procedures and methodologies applicable to the management of credit, market, operational and liquidity risk or possibly to partial tasks connected with the management of finance.

We usually work on projects individually.  Partial outputs are discussed at meetings with our clients. During the project we make sure that the final output fully meets the needs of our clients. This means  -clear and thorough implementation whilst maintaining timeliness and reasonable cost.

Advantages of cooperation

  • Our knowledge is a guarantee of an expert and consistent approach to the addressed issue
  • We will complement the missing resources via long-term cooperation or only short-term partial contribution
  • We deliver the outputs on time and within the agreed upon scope. Outputs are clear and can be implemented immediately
  • Our success is measured by the success of our clients

 

Company offers consulting services in the following areas:

Development of systems for measuring and/or managing one or more of the following risks:

credit, market, liquidity, insurance, operational and weather

The following activities represent an integral part of a risk management system. Advanced Risk Management offers assistance with both system set-ups and partial improvement to existing systems:  
  •  identification of risks and development of a risk map
  • development of models for measurement of identified risks
  • risk monitoring
  • assistance with the set-up of internal processes necessary for risk management (limit observation, approval processes)
  • setting-up reporting

Assistance with formulation and drafting of internal guidelines in the financial area

Companies perform certain activities on the principle "because it's been done like this for years". That is, without any internal regulations and with no documentation. In order to maintain continuity of a given process it is necessary to coordinate all activities and processes into a global system of internal regulation. Advanced Risk Management offers its services in places where resources do not allow the dedication of sufficient attention to internal regulations. Our cooperation is effected as follows:
  • at meetings with clients, we define the scope of activity
  • if the documentation exists, we will update, improve and complete it
  • in cases where documentation does not exist, we will draft it based on our experience and discussions with persons in charge
  • the drafted documentation is elaborated into details and the output always clear

Implementation of Basel II, Basel III and Solvency II

Advanced Risk Management has long-term experience with the implementation of regulatory measures into risk management systems in financial institutions. In the area of regulatory implementation of Basel II, Basel III and Solvency II we offer the following services:

Basel II

  • setting up the management of market, credit and operational risk according to the relevant legislation of regulatory
  • setting up models for the calculation of capital requirements for credit, market and operational risk
  • assistance with the implementation of processes, reports and applications developed under Basel II into routine operations not only within risk management departments but also in other parts of the financial institution
  • support of measuring credit, market and operational risk under Pillar II
  • comprehensive support of the implementation of IRB approach and/or AMA approach

Basel III

  • Implementation of Basel III requirements for:
    • capital and capital adequacy (increase of capital for securitization, re-securitization, selected items of the trading book and for counterparty credit risk)
    • leverage ratio
    • counter-cyclicality (rules for setting up and development of countercyclical buffers)
    • minimum liquidity (setting up of monitoring instruments)

Solvency II

  • Implementation of the regulation Solvency II:
    • calculation of solvency (capital adequacy)
    • development of internal models
    • analysis of financial risks and development of models for their management
    • analysis of insurance risks, calculation of the premium
    • analysis of the valuation of collateral
    • calculation of technical reserves
    • analysis of the valuation of financial assets
    • development of regulations for management and controlling systems
    • the introduction of principles of remuneration

Development of an internal model

Advanced Risk Management has a very strong team of analysts with experience in the development of mathematical and statistical models for risk management:
  • credit risk (development of scoring functions and internal ratings)
  • operational risk (AMA models)
  • market risk (VaR model and other internal models developed in cooperation with the client)
Advanced Risk Management also offers assistance with the development of own internal models for financial management as well as for management in other areas including  manufacturing and marketing.