Overview
FACT is a flexible framework to manage credit risk. Designed to handle the entire rating and limit approval process, FACT can be configured to internal procedures: credit applications can easily be added, including custom workflow, approval and archiving mechanisms. Financial templates for analysing accounts can easily be configured.
FACT can integrate the databases published by BvD including Bankscope, Osiris and Isis. Thanks to its open architecture, FACT can integrate various data from back office and/or risk methodologies. It can generate custom e-mail alerts as well as complex batch calculations.
As a framework, FACT is provided with a development toolkit that includes a model designer, a script editor, a customisable workflow engine and a powerful API.
Financial institutions use FACT to meet their Basel 2 capital adequacy requirements for the advanced approach.
How it helps you
FACT is a powerful data repository for capturing financial statements in various industry templates allowing you to cover banks, corporates, insurance companies, SMEs, retail companies, country, funds, project finance, real estate etc. Templates can easily be added including assets, liabilities, income and cash flow statements.
Custom ratios and complex mathematical calculations can be implemented in C#. Annualisations as well as forecasting scenarios are also built-in functionalities.
A FACT solution can also combine multiple data sources. You can choose to nominate data from BvD products, integrate any third party data source or manually key in the required data fields.
A library of internal borrower and facility rating models can be built into FACT, with various degrees of complexity. Various quantative variables and ratios can be part of the analysis along with judgmental and support factors. Once implemented, models can be launched in batch mode to monitor the portfolio on an on-going basis.
BvD has technical expertise in integrating external models into FACT, namely: FITCH Solutions CRS bank rating models, FITCH Solutions Advisory Templates, CreditReform BilanzRating and EIU Country Risk Rating. Other models available on the market from various vendors have been integrated on request.
- Credit process automation and workflow
FACT provides an unprecedented level of automation, control, and flexibility by automating the creation of credit proposals. Credit Templates are easily designed with the Report Designer, and can integrate any data available via FACT. Graphics can be exported by default in Word, PDF and Excel. Credit proposals for counterparties typically include limit information, proposed facilities including collateral information and internal credit ratings of the counterparty, generated by models built into the system.
The FACT workflow module supports all processes that involve sending a proposed rating, a credit limit or application to the next level of authority. The module makes the approval process more efficient by organising and tracking credit analysts’ and risk managers’ tasks and by providing a full audit trail when completed.
Credit analysts can start a workflow in FACT by preparing a credit/rating proposal. On completion, proposals can be send to risk managers for approval. Risk managers can have an overview of pending proposals and approve, reject or reassign the proposed rating or limit. Functionalities such as task lists and e-mail alerts are also available.
In FACT you can store counterparty data, facility data and collateral data. Counterparties’ Probability of Default of can be determined from rating models incorporated into FACT, whilst Loss Given default and Exposure at Default can be calculated per facility.
These parameters can be used for calculating in FACT the capital requirements under the Basel 2 standardised, foundation and advanced approaches.
BvD has entered an agreement with Cornhill Consulting to integrate its Capital Allocation/Economic Capital Calculation Model into FACT: their Quantoid Camino solution enables capital allocation/RAROC calculations to be integrated into the credit workflow and reports. The solution maximises capital efficiency by facilitating effective deal analysis and performance evaluation. It assists portfolio management by providing instant access to capital usage information.
FACT is the ideal solution for implementation of the Basel 2 standardised, foundation and advanced internal rating based (IRB) approaches. Basel 2 requirements such as the frequent review of borrowers, assignment of ratings to borrowers, rating history and rating override reporting, storage of facility and collateral information can be accommodated in FACT.
FACT includes standard portfolio analysis report such as Group reports, peer comparison reports and rating migration matrices. FACT enables the user to built extensive Limit and Exposure reports and can provide rating overviews per region, country, sector and group.
FACT is provided with an administration toolkit which allows to create user roles that define the access rights within the application on a specific portfolio. Users can be assigned specific roles on the portfolios they are covering. The layout of the financial template, rating sheets or credit applications can be amended with the Report Designer. New data fields can be added without any programming skills as well as new elements and relations.
FACT is provided with a developer toolkit which allows you to configure the application with maximum of flexibility. It includes:
- A C# script Editor and a powerful API which allows you to implement complex business logic and to dynamically customise the GUI depending on events or data values.
- An XML webservice is available to upload data into the SQL, facilitating the data integration.
- The Back Office Manager allows you managing the release of you configuration of FACT between different instances (e.g development, User Acceptance Test and Production). It also executes complex data extraction and custom batch calculations which can be scheduled.
- A Robust, Secure and Scalable Architecture
FACT is based on a three-tier architecture and can support several thousand of users. It can be hosted within your institution or by BvD on dedicated hardware. The framework includes the most recent technologies in terms of access controls, data encryption and compression.
Benefits
- FACT helps manage and run all your risk models within a single web based platform.
- The FACT Workflow Manager helps you align your credit processes, financial data capture, limit setting and credit approval - all tailored to your needs.
- FACT integrates internal and external data sources
- We have expert teams ready to advise on the implementation and management of your tailored FACT solution