The ready-to-go solution is cost-effective, quickly installed and contains simple interfaces as well as an easy-to-use UI. A business department can use this solution without IT support.
Collective impairment is an approach that calculates risk provisions for portfolios containing loans with similar risk attributes. Probabilities for default (PD) as well as the amount of the expected loss (LGD) are determined for these portfolios using historical payment and default data. The product from PD, LGD and the individual EAD for a deal is proportionally equal to the amount to be disclosed for a deal in risk provisioning.
FlexFinance provides alternative models for calculating the expected credit losses, depending on the stage, the portfolio and the information available on default. These models come as encapsulated components that can be exchanged and adjusted to meet individual requirements. When a potential loan default is calculated, macroeconomic parameters in the form of scenarios, which allow a risk provision to be analysed on a "point-in-time” basis, are considered. Financial assets can be allocated to one stage and credit quality assessed automatically if requested, according to quantitative and qualitative rules that can be configured. Even if allocation is implemented manually, the transfer of the book values between the stages over a period of time can be traced.