The document outlines the features and modules of the Insight Risk platform, which is designed to help financial institutions achieve Basel II compliance and improve risk management post-credit crisis. It discusses the platform's capabilities in managing credit, market, and operational risks, while also providing advanced analytics and asset-liability management solutions. Additionally, it highlights implementation timelines and costs associated with adopting the various modules, including Basel II, market analytics, and asset-liability management.

1. Insight Risk
November 2010

2. Agenda
Slide 2
1.Discuss your Risk requirement
2.Overview of Insight Risk
3.Basel II module
4.Market Analytics module
5.ALM module
6.Q&A

3. Elevator pitch
“Risk comes from not knowing
what you are doing” –Warren Buffet
30 January 2015

4. Risk Management beyond the Credit Crisis
 State of markets today
 The credit crisis has exposed some significant weaknesses in risk
management across the financial services industry.
 Banking world has changed
 Banks have been forced to take a critical look at how they manage risk
 Financial service regulators have been forced to address the shortcomings
of Basel II
 Forward looking to Basel III (tier I capital ratio increased and liquidity buffer)
 Insight-Risk addresses major challenges faced in banking today
 Market Risk Management
 Liquidity risk management/Asset & Liabilities
 Retail credit
 Home / host regulation

5. What is Insight Risk?
Insight Risk is a modular enterprise risk management platform that enables
Financial institutions to be basel II compliant.
It uses Insight Base as its core platform to:
1. Integrate data (T24 and 3d party)
2. Store and analyse
3. Report and display (Insight Dashboard, Risk UI, SharePoint, reports...)
It offers 3 ad-on modules
1. Basel II (regulatory capital engine)
2. Market Analytics (advanced analytics engine)
3. Asset and Liability management
Slide 5

6. Insight Base
Slide 6
Insight
Base

7. Insight Intelligence Platform
30 January 2015
Insight
Base
Risk
Intelligence
Performance
Intelligence
Customer
Intelligence
Financial
Intelligence
Basel II
Market
Analytics
ALM

8. Insight Base
Insight Risk
30 January 2015
Insight
Database (SQL)
T24
DW.Export CSV
Data
Integration
Data
Storage/
analytics
Reporting
Misys Fiserv
Publisher Analyser
Staging tables
Operational
intelligence
Risk
Intelligence
Risk-UIInsight-UI
Customer
Intelligence
Financial
intelligence
Insight Risk benefits:
 Integration efficiency (E.g. 90 days
implementation for the Basel II
module- Standardised approach)
 Data integrity (reconciliation with the
data source)
 Insight Base as the new T24
extraction and reporting solution
(replace the MI module)
 Shared infrastructure with other
Insight modules (financials...)
 Microsoft investment into Insight
 Supports SharePoint 2010

9. Insight Return on Investment Analysis
Insight Pre-packaged Solution – 75 to 100 man days
• Fixed Price Resourcing $115k
• Insight Pre-packaged App $negotiable
• Microsoft Platform $?
• Hardware $?
Enterprise Data Warehouse Solution – 2 years+
What is the resulting cost in:
• Time?
• Consultancy?
• Software Licenses?
• Hardware?
INSIGHT
Integration
Layer
Data Model
ETL (Typically 3-6 months)
INTEGRATOR / DATA CLEANSING
• Software - $?
• Consultancy - $?
ENTERPRISE DATA WAREHOUSE
• Software License - $?
• Hardware - $?
• Consultancy - $?
(Typical Cost $1-2m)
RECOGNISED BI PACKAGE
• Software License - $?
• Consolidation - $?
• Consultancy - $?
REPORTING & METRICS - $?
FTP - $?
COST ALLOCATION - $?
TRANSACTION BASED COSTING - $?
Core Banking System
Presentation
Layer
Cube Design &
Consolidation
DW EXPORT (T24)
INSIGHT PRE
PACKAGED APPS
DASHBOARDS, KPI’S, FTP
ON DEMAND REPORTING
CORPORATE BRANDING
COST ALLOCATION
CONSOLIDATION
TYPICALDATAWAREHOUSE

10. Source - IBS Journal Case Studies – October 2010/Issue 20.2
Mees Pierson Guernsey & Curacao (Temenos T24 Client)
Have had a number of ‘attempts’ of implementing BI
Customer Profitability & Account Officer New Business
TM1 tool from COGNOS (now IBM’s analytics division)
Resulted in the IT departments biggest failure to deliver
Insight evaluated – Signed June 2009
Phase 1 Customer Revenue (out-of-the-box solution)
Phase 2 AUM (bespoke development) & KPI’s

11. Basel II framework fully supported by Insight Risk
Pillar I
Credit Risk
Standardised
Approach
IRB-Foundation
Approach
IRB-Advanced
Approach
Market
Risk
Standardised
Approach
InternalModels
Approach
Operational
Risk
BasicIndicator
Approach
Standardised
Approach
AMA
Pillar
II
ConcentrationRisk
InterestrateRisk
LiquidityRisk
Stress/Backtesting
Pillar
III
Regulatory
reporting
Home/host
reporting
guideline
Insight Risk modules
Basel II ALM
Market
Analytics

12. Basel II module
Slide 12
Implementation
In 90 days
Insight Risk’s Basel II module permits our customers to set up a flexible Basel II
framework in order to:
•Calculate regulatory capitals for credit, market and operational risks
•Exposures types
•Regulatory Risk weights
•Credit Rating (S&P, credit scoring engines...)
•Credit risk mitigation engine (simple/comprehensive)
•Home/host regulation
•Simulate the Credit concentration risk (stress test)
•Perform the Basel II reporting

13. Regulatory Capital engine
Slide 13
Credit Risk
Standardised
100
%
External rating
Claim type
$100ml loan X 20% (AAA) X 8% capital= $1.6 ml
$100ml loan X 100% (BB-) X 8% capital= $8 ml
Foundation IRB
Advanced IRB
PD EAD LGD M
Internal estimate
3 elements (IRB):
1. Risk
components
2. Risk weights
functions
3. Minimum
requirement
Market Risk
ScopeTrading Book
Fixed income
Equity
Commodities
Currencies
Banking Book
Commodities
Currencies
Sum of the
building
blocks
Standardised
Internal Model (IMA)
Qualitative Requirement
•10 day horizon
•99% confidence
•One year of data
•Quaterly updating
VaR
Stress testing
Back testing
Green: <5 exceptions
Yellow: 5-9
Red: 10+
Operational Risk
K Op BIA= Last 3years Rev/3 X 12.5%
Basic Indicador Approach
BIA with Business unit segmentation and RW
Standardised Approach
AMA
Credit Risk Mitigation
Simple approach:
1. RW on collaterals for Sec
2. RW on counterparty for
Unsec
Comprehensive approach:
Reduce exposure by collateral
(+ haircuts)

14. Market Analytics module
Assess trading book exposures and perform advanced analytics
Functionality Includes
 Yield Curve Modelling
 Calculation of Volatilities from history
 Calculation of Correlations from history
 Covariance based VaR – Online at any level
 Historical VaR
 Monte Carlo VaR
 Incremental VaR
 Marginal VaR
 Stress Testing
 Back Testing
 Pricing Tools
Implementation depends upon Bank’s complexity and policies
RWA calc:
Internal models approach
Insight-Risk calculates covariance based VaR on a certain horizon with a confidence level of 99.9% (10
days VaR under Basel II) and applies the regulator factor to determine the corresponding Capital Charge.
Slide 14
Implementation
In 120 days

15. ALM
The ALM module allows the bank to compute the bank exposure to interest rates,
liquidity, inflation index and sensitivity to FX risk.
Functionalities:
Time buckets definition
GAP analysis
Past and future net interest income (NII)
Maturity Pattern of Deposits and Advances and Cash Flow Mismatch
Slide 15
Implementation
In 90 days

16. Thank you