We highlight – via a series of posts on Credit Risk Management (Read the prelude – “Risk Management : How Can we Help You?“) – the ever-growing challenge of credit risk in financial institutions, the benefits of real-time analytics and the wave of change that can be brought about with Heckyl’s unique capabilities. We bring to you the first post, from the series.
Exposure to the probability of default by their debtors, also called as Credit Risk, is the major risk the global banking system is facing today. In the current volatile market condition, where Indian companies are confronted with issues like demand slowdown, unfinished projects set up at inflated costs, lengthening working capital cycle squeezing cash flows, it is not uncommon for an institution to default on payments. This leads to huge non-performing loans sitting on the banks’ balance sheets.
Any rumor or news can break out from any source. As highlighted in our previous blog post, A Needle in the Digital Haystack, spotting opportunities from these new data sets is very valuable. A trading opportunity can come from any source at any time, which makes it necessary to track a huge number of sources but also filter out noise at the same time.