Credit Risk… De-Risked!

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We highlighted – via a series of posts on Credit Risk Management (Read the  previous blog –  “Soaring Non-Performing Assets: The Paramount Problem“) – the ever-growing challenge of credit risk in financial institutions, the benefits of real-time analytics and the way in which Heckyl’s unique capabilities can be used to decipher credit risk management puzzle. We bring to you the third post, from the tile

Heckyl believes there is a lot more that can be done in the credit risk space in the financial institutions. It is no secret anymore that be it the banks or the non-banking financial companies (NBFC), the wrath of the non-performing assets has spared none. Although, these financial institutions have their existing risk models in place, the important question remains, that is, are they able to comprehensively highlight the impending crisis ahead of time?

Heckyl has developed the First of its Kind Early Warning System for Credit Risk. The platform is an ‘early discovery’ application that empowers the credit risk team with intelligent insights on companies in real-time. It would essentially act as an indicator of pre-default behaviour of companies through deep-dive analytics, by virtue of which any negative buzz around the company will be highlighted as an alert.

In the previous blogs, we highlighted Heckyl’s belief in the enormous potential open data sets hold to generate intelligent analytics around credit risk. Banks, too, have internal data that can be used extensively to reveal industry trends and business patterns. Therefore, the engine leverages on the internal data at banks and combines it with analytics from social media data, Registrar of Companies (ROC) data, open data sets, litigation data, pro-cyclicality and global economic indicators to enable a comprehensive real-time risk monitoring methodology.

Heckyl’s Credit Risk Analytics platform provides dedicated and customized dashboards for all members in the risk team hierarchy:  from the Sales manager to the Relationship manager to the Risk analyst to the highest level i.e. the Chief Risk Officer (CRO). The CRO Dashboard is a one-stop shop for the CRO to get a view on the health of overall portfolio exposures across the industry. On the other hand, the risk analyst can monitor the companies assigned to his portfolio.

We give you a glimpse of the analytical capabilities of a few screens.

A unique way to learn about the health of your portfolio at a glance is through the News Analytics Dashboard. The system analyses the buzz about the companies in your portfolio from 15 lakh open sources across the web world and social media including reactions of analysts, experts, fund managers and traders on blogs and social media sites and drives it in the form of sentiment analysis.Blog 3 -img1

A green colour associated with a company indicates a cumulative positive sentiment for the company based on the news flow for the company, whereas a red colour is indicative of a negative sentiment for the company. This sentiment is updated in real-time for each company basis the real-time news flow from across the web-world and social media. The idea is to make you aware about any such buzz or signal that might indicate a negative performance issue within the company. You can then drill down on a particular company to assess its health in detail.

Blog 3- img2The company overview screen allows you to check the company’s health based on multiple parameters. The news and financial analytics is further broken down to get an overview on the exposure to the company vs industry, risk signals if any, past repayment performance, financial health indicators, etc.  A deteriorating performance of any company against any of these parameters is flagged-off to the risk team. Similar overview screens are available at portfolio and sector level as well.

You can further evaluate the company performance by drilling down on its financial health. A Heckyl proprietary financial health-score is generated by the engine for each borrower, which is a function of the key ratios and fundaBlog 3- img3.pngmentals of the company. These parameters are assessed and assigned a weighted-score that is summed up to a cumulative financial score for the company. You can then dive deeper into each of these attributes on the Financial Charts and Trend Analysis Dashboard. The idea is to intelligently combine the worlds of structured and unstructured data to provide a 360O view on your portfolio.

Additionally, the risk team can also analyse the supply-chain correlations, sector correlations, peer-to-peer comparisons, collateral management, global economic factors affecting the portfolio, portfolio benchmark performance, credit limit breaches etc. to have a comprehensive awareness around the companies in his portfolio.  (Look out for these features in the upcoming blogs on Alpha Pulse).

The concept of the product is to provide the risk team with a solution that provides real-time in-depth analysis and critical alerts to give them a time-lead to alleviate at-risk situations and make informed decisions on re-aligning exposure mix. We understand that out of a 100 odd alerts, some risks might have already been accounted for and not all might have similar intensities, but then risk is all about that ‘one signal’ that the financial world misses out on, isn’t it?

To know more about Heckyl’s Risk Management Platform, mail us at

Watch out this space for more on credit risk management solution..

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