SAS Banking Intelligence Solutions

Implementing solutions of SAS began in Creditprombank in 2006 and was caused as the internal reasons – development of retail business of bank and review of credit policy, and external – it is profitable to be selected with market situation and need against the background of competitors. The first solutions constructed based on SAS were started in the spring of 2007. Since then the circle of the tasks solved using a business intelligence constantly extends, and an analytical system develops according to requirements of bank.

Tasks

• Create the centralized liquidity management system.

• Keep business development in the field of consumer crediting.

• Increase efficiency of internal processes of risk management.

• Increase quality of the loan portfolio.

• Reduce terms and increase quality of training of reports on risks.

"To strengthen the positions in the market, in 2005-2006 we strongly stirred up the activity in a retail segment. It became difficult to manage the business distributed through the whole country because of rapid growth and data storage on retail transactions and lack of technologies which would allow quickly, in the automatic mode to collect and process data and to create analytical reports, in particular, on liquidity gaps. Specialized tools were required", - the director of the department of financial risk management of Creditprombank, PhD in Technological Sciences Igor Voloshin tells about the reasons of implementation of analytical solutions.

Solution

For the solution of assigned tasks systems allowing to provide quick access to data, to process data bulks, to build difficult financial models and models of risks assessment were required for bank. Their flexibility and adaptivity, transparency of algorithms and a possibility of independent change and addition with analysts of bank were important requirements to IT systems. Experiment of vendor on implementation of systems in other financial institutions was also of great importance. To the marked criteria most there corresponded solutions of SAS.

"For us the important advantage of the solution of SAS company is that it represents the reliable base with broad tool kit for creation of additional settings and operational making changes by own forces", - Igor Voloshin says.

Project Progress

Cooperation of Creditprombank and SAS Russia/CIS company lasts more than 6 years. Conditionally it can be separated into two stages – initial implementation of analytical tools of SAS and projects on further development of systems and expansion of a circle of solvable tasks. At the first stage in bank the data warehouse was built and analytical tools of SAS on the basis of which on own methodology of bank the management system for liquidity and a liquidity risk was implemented are implemented. The project was implemented approximately for half a year, including preproject preparation and drawing up technical specifications.

"There were some problems connected with data, - Igor Voloshin tells about project implementation. - It was necessary to decide on data sources: whether to load data from local bases of 12 branches, the Kiev regional department and a card system of IS-Card or from the consolidated base which comprises the aggregated information on all bank. As a result, decided to load data from the consolidated base. At the same time it was necessary to implement urgently a possibility of loading in the consolidated database from IS-Card which there were not loaded by then. Ensuring quality of data became the second important task which was successfully solved too".

Daily data loading from the consolidated base and other sources in the Data warehouse is organized automatically. Postings, account balances, information on agreements, payment schedules are loaded into Storage, customer information, rates, etc. Besides, "is improved" in Storage information on the security quotations, balances of banks partners and insurance companies, treasurer transactions and many other things.

At the second stage calculations of other types of risks were transferred to SAS: currency, price and percentage risks; and also collection of information on network of bank concerning the events connected with operational risks and preparation of the corresponding reports is organized. After implementation of SAS Credit Scoring in bank creation of scoring models was implemented. A bit later problems of static pricing of products, forecasting of a remaining balance on term deposits of individuals, the analysis of urgency of means poste restante, etc. were solved.

Based on SAS Portal technologies collective access to reporting system was organized. At the same time the system of SAS provides proper management of access rights of users and completely satisfies bank in terms of information security.

Results

Thanks to implementing solutions of SAS, bank it was succeeded to save the acceptable level of liquidity at extremely rapid growth of the loan portfolio – for 3 years, from 2005 to 2008, he grew up by 6.6 times. At the same time decision making time on the liquidity management of bank was reduced by 2–3 times.

Because handmade volume sharply decreased and the volume of potential errors at introduction of data decreased, in bank terms of preparation of reports on risks were reduced and the quality of these reports grew. Start of new financial models and models of risks assessment accelerated.

Implementation of SAS expanded understanding of the processes happening in bank and in general increased transparency of management at the level of the organization that helped to adjust risk management process in bank according to requirements of ISO 9001:2000 and also one of the first among the Ukrainian banks to receive the appropriate international certificate of quality. Also Creditprombank became one of the first Ukrainian banks to which the Ernst&Young auditing company confirmed compliance of the risks assessments executed in SAS, to requirements of IFRS 7.

Having constructed a flexible resource management system which provides rapid response to changes of market situation, Creditprombank on the basis of the solution of SAS could overcome an economic crisis of 2008 with smaller losses.

"Further based on the implemented SAS platform we are going to create models of demand and supply on different products, to manage interest rates for assets and liabilities. Also we consider the possibilities of development of behavioral models, for example, of a reinvestment and early repayment of term deposits taking into account economic incentives", - Igor Voloshin says about further plans.