SAS has packaged two of its existing software modules to deliver SAS Capital Planning and Management, a solution designed to help banks meet regulatory and internal capital management requirements quickly and efficiently.
The package combines SAS Financial Management with specific capabilities added for capital planning, such as calculation rules and capital allocation, with SAS Operations Research, which supports the optimisation of capital allocation. It also includes a slice of SAS intellectual property. Both SAS Financial Management and SAS Operations Research are mature technologies with more than 10 years of continuous development and broad customer bases beyond the financial services sector.
The SAS capital management solution has been in development for about a year and was brought to market early this year. To date, it has attracted 15 active prospects in the US and a similar number in Europe.
Vincent Kilcoyne, capital markets specialist at SAS, explains: “We recognised that capital management covers multiple disciplines including finance, risk and operations, so we brought them all together in a single environment. Our customers often have to rely on extensive work by their IT departments to run stress tests and simulations, but we have included them in SAS Capital Planning and Management and enable users from departments such as finance, treasury, risk and strategy to access information they require for the purposes of capital management.”
The solution is data agnostic and includes adapters for data federation. It can scale to meet banks’ requirements and can work with sophisticated third-party analytical models as well as integrate additional SAS analytical functionality.
Looking at risk weighted assets from a market risk perspective, for example, Kilcoyne says the capital management software can calculate capital requirements in one or two hours, saving banks time and sometimes lowering capital requirements. In terms of regulation, he notes US Comprehensive Capital Analysis and Review regulation as a driver for adopting capital management solutions, as well as forthcoming Basel III regulation in Europe.