Solutions

Risk Alert: The Early Warning System of the future

An AI and insight-driven Early Warning System for detecting credit deterioration for company entities across all portfolios.

Automating portfolio management

Loan counterparty reviews are a manual, periodic and mostly reactive process. They are too often based on financial ratios that are backward-looking and potentially already outdated at review time, and do not provide the full view of the true risks faced by the organisation.

Early warning signals preceding times of financial distress can usually be picked up online, but manual monitoring is a hit-and-miss and time-consuming approach. Risk Alert empowers you to do things different. Welcome to the future.

Risk Alert reinvents the entire process around Early Warning Systems

Portfolio Managers typically start their day by reading a variety of news sources to identify potential threats impacting their portfolio, relevant industries and geolocations.

Threat identification is then driven by a chance encounter and if time allows further research and more information collected. This typical thread identification process is manually intensive, subjective and limited by the language ability of the reader.

Reduced risk of default and improved credit risk management efficiency

Moving to Risk Alert means thousands of news sources across multiple jurisdictions and languages are automatically scanned and tied together with other data clusters such as latest financial, behavioural, and macro-economic data to identify and categorise threats. This is then integrated to produce a likelihood of the signal resulting in a deterioration of credit quality. This new way of monitoring gives the Portfolio manager access to a single summary of all threats relating to borrowers in the portfolio, allowing more time for pro-active mitigation to take place, which in turn leads to a reduced risk of default and better understanding of the data clusters.

Under the hood

The Deloitte Risk Alert system uses an Natural Language Processing (NLP) engine to assess the authoritativeness of the source, so the risk of false signals is reduced. True semantics analytics are applied to categorise threats and filter out noise.

The system is also fully integrated with internal and other external data ensuring a true 360-degree view.

It boasts configurable dashboards fit for different roles, thus giving the Chief Risk Officer, the Chief Credit Officer, Portfolio Managers, Relationship Managers, Credit Analysts their own customised view of the metrics and risk drivers important to them.

Regulatory Landscape on Early Warning Systems

Regulators are expecting banks to adopt effective Early Warning Systems that can pro-actively identify emerging events and its impact on the bank clients to enhance resiliency and empower strategic decision making, it is therefore essential to build and deploy a customer level proactive credit tool for more accurate event driven monitoring.

Deloitte Risk Alert is the solution you have been searching for, offering a revolutionised portfolio monitoring process, near real time updates, all powered by high frequency data and Machine Learning across more than 4 million data sources, allowing you to identify risk early, and act before others do, this is your Risk Alert.

 

If you want further information, please reach out to Damian or Andrew or Natalie

Key contacts

Damian Hales

Damian Hales

Partner

Damian is a Partner within the firm’s Financial Risk Measurement team. He has over 26 years of experience in the financial sector and specialises in Credit Risk Management across the full credit lifec... More

Andrew Berry

Andrew Berry

Director

Andrew helps organisations transform their risk and compliance processes through innovation, disruptive technology and better understanding of their future target operating model. His current areas of... More

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Edward Venter

Edward Venter

Director

Edward Venter is a Director in Deloitte’s Financial Risk Measurement team within Risk Advisory, specialising in the development and application of credit risk modelling to support financial institutio... More

Natalie Soldatkova

Natalie Soldatkova

Senior Manager

Over last 10 years Natalie have been leading advisory projects delivered to regulators, credit bureaus, banks, microfinance and fintech institutions worldwide. Prior to Deloitte, her employment includ... More