ALM Solutions

Asset Liability Management in outsourcing

We provide comprehensive interest rate and liquidity risk management for small and mid-sized financial institutions leveraging our best in-class technology and in-depth knowledge of financial risk management across multiple jurisdictions.

Our asset liability management (ALM) in outsourcing service provides clients with a low risk, cost-effective solution to implement or advance their treasury, interest rate and liquidity management framework. By leveraging best in class technology (MORS Software), configured to regulatory & industry best practices and operated by our in-house experienced consultants, our clients benefit from having a comprehensive view of their interest rate, liquidity and treasury related credit risks and performance.

With minimal investment and within a few weeks, clients will be able to benefit from an in-depth understanding of the potential risks and opportunities to their current and future net interest margin and liquidity positions, helping them to make informed decisions to manage and control these risks and inform financial and strategic planning.

You will benefit from:

1. Immediate Results: Our ALM in outsourcing service will provide you with a comprehensive view and analysis of your balance sheet and risk positions allowing you to understand and control existing and future risks and opportunities.
2. Cost efficient alternative: We provide access to world class solutions without the need to acquire a license / hardware by our clients. Our approach is a low risk and affordable alternative to an internal multi-year, resource-intensive and uncertain in-house ALM development project.
3. Leverage our risk management expertise to complement your existing resources: Hiring, developing and retaining advanced in-house risk management expertise is a common challenge faced by many smaller institutions. In addition to producing regular reports and analysis, we will provide training and assistance to your team for them to understand and use our reports and supporting databases for decision making and to complement existing MIS.
4. Information to guide your decision making: Move beyond regulatory compliance. Senior Management will be able to incorporate advanced risk-reward concepts into their ALM decision making process (positioning, product pricing, financial planning)

Scope of Services – Tailor-made solutions for your ALM

Our outsourced ALM services provide all necessary elements to implement a robust and sustainable balance sheet management practice. We work with our clients to customize metrics and reports to deliver a tailored made, practical solution suited to the specific nature, size, and complexity of their operations. Considering industry “best practices” and regulatory requirements, we will benchmark your operations, provide you with a menu of options and a roadmap to establish and achieve a target maturity level for treasury and risk management operations, aligned with your business goals, and internal and external expectations.

• Interest Rate Risk in the Banking Book - IRRBB (Earnings at Risk and Economic Value) under user defined parallel and non-parallel rate shifts and rate ramps up to 60-month time horizon.
• Liquidity Risk – Regulatory metrics (e.g. LCR, NSFR) and internal metrics using a 30 to 90 day horizon.
• Funds Transfer Pricing results on existing book and new originations – understanding marginal contribution and enabling transaction and product level performance management.
• Monthly ALCO reports and analytics (PDF and Excel available)
• Repricing and maturing gap reports.
• Results database (for internal MIS generation)
• Relevant market data
• Supporting documentation (methodology, models, parameters)

The implementation process is generally carried out over a six-week period during which we will work with our clients to map their transactional information to pre-established templates that will be used to automatically import the required information into our ALM system. Information is then submitted on a periodic basis through our secured website. As part of the implementation process, we will load and process two months of historical data to test data flow, product level configuration and reporting (ALM and FTP)

Transactions are modelled at the instrument level, allowing different levels of aggregation for reporting purposes. Our ALM solution (MORS Software) enables us to model all types of banking products (cash and derivatives), including explicit (caps, floors) and embedded options (administered rate products, e.g. non-maturity deposits and credit cards), under a constant balance sheet assumption (regulatory view) or dynamic assumptions (management view), including sub-product level static or scenario dependent assumptions (e.g. prepayment, rate sensitivity, deposit decay, capital target duration)

Using client defined chart of accounts, parameters and level of granularity, we deliver our reports within a couple of business days (2-3) for client review and follow up with a monthly call to review the monthly report, including NII forecast and sensitivity (what-if analysis), balance sheet trends, limit monitoring and back testing of previous month

Our partners for ALM solutions:

IBSM Solutions is a Canadian boutique firm with offices in Toronto and Mexico. IBSM Solutions provides subject matter expertise across all aspects of asset liability management, profitability analysis and performance measurement. They help organizations to implement and advance its Treasury and Risk Management  capabilities, complementing and supporting internal resources to meet competitive and regulatory challenges.

MORS Software is our technological partner. MORS is a complete Asset & Liability (ALM), liquidity, interest rate risk and treasury management solution for banks.

MORS Software develops and provides a complete Asset & Liability (ALM), liquidity, interest rate risk and treasury management solution for banks. Dynamic modelling of the bank's balance sheet makes it possible to satisfy both the highest demands on the internal management of the bank and the requirements of regulation.

Implementation of Internal ALM solution

Bearning represents MORS Software in CEE region. MORS solution is based on intelligent and powerful in-memory analytics, offering real-time analysis and reporting throughout the entire bank. Many financial institutions use MORS solution for monitoring, managing and optimizing their performance within internal and external constraints. 

Find more about MORS implementation on our webpage here. 

Contact us for more info about solutions for your ALM: