Abacus Delivers an Industry standard approach

Abacus is Quick to implement

Most financial institutions can implement Abacus in less than three months.  Our solution has been developed to overcome many of the hurdles that make economic capital analytics slow and difficult to deploy.

         No hardware/software installation is required Abacus is delivered through a streamlined application service provider (ASP) model that allows the client to access the application through an Internet browser.

         No legacy system integration is involved Data requirements for Abacus are aggregated to the extent that data can be entered manually or imported through a simple Excel spreadsheet interface.

         ERisk provides an extensive benchmark database In the situation where a client is missing data to parameterize the model, ERisk is able to provide industry benchmarks as a placeholder until the client can develop the required data

         Implementation is conducted by an expert team ERisks client engineers have extensive experience in interpreting client data, preparing it to be input into Abacus, and managing the deployment process.  A typical deployment timeline includes the following:

Abacus Leverages client staff

The client resources required to install and run Abacus are minimal.  The client resource commitment include one senior risk professional to understand Abacus from a decision-making perspective and one junior risk professional to coordinate data requirements and validate output from the system. By contrast, banks that implement Economic Capital analytics in-house often require up to five full-time employees to accomplish the same task. 

Abacus frees up valuable risk management resources for more strategic applications of risk measurement and allows smaller banks that do not have dedicated risk resources to access world-class Economic Capital and RAROC measurements.

ERisks Benchmark DataBase Supports Peer Analysis

An important benefit of ERisks standardized analytical approach is that RAROC results can be compared against peers on an apples-to-apples basis. As depicted in the sample output below, comparisons with your peers can even be made at the line of business level:

ERisk has seeded its business unit and product RAROC database with benchmarks from Oliver, Wyman & Companys experience.  This database includes information from over 50 banks, covering the U.S., Canada, and Europe.

Clients are able to opt in to the benchmarking program by providing their RAROC measures by business and product.  The name of the institution is kept strictly confidential.  Once a bank has provided its data, it then receives access to the full database of benchmarks.  Over time, as ERisks client base grows, the depth of the RAROC database will grow in step.

Abacus will keep you on the cutting edge

One of the problems that banks face in trying to implement Economic Capital analytics in-house is that the analytics do not stand still -- there is constant innovation in the field in measuring risk and linking that risk to capital.  Abacus models are updated regularly to reflect the best of breed analytics for each risk type.  By centralizing research and development costs, ERisk effectively spreads these costs over its entire client base.

Abacus minimizes the risk of losing your institutional memory

Theres a true story that illustrates the benefits of outsourcing your economic capital analytics to ERisk: An early adopter bank had engaged a consultant to develop a customized in-house Economic Capital and RAROC system.  The bank had two people on the team who were designated the project owners.  The bank implemented the approach on spreadsheets and integrated these into management reports.  Five years later, the bank called the consultant back to give their system a tune up.  The consultant found that the original people on the project had left the bank, and the system had devolved into something that was completely wrong.  The bank had lost its institutional knowledge of the Economic Capital and RAROC approach.

Banks minimize the risk of losing their institutional memory by outsourcing analytics to ERisk.  While ERisks clients learn the methodologies well enough to understand the system, they do not have to be responsible for maintaining the analytics ERisk will ensure that the analytics are correct and up-to-date with the latest methodologies.  Furthermore, ERisk will support training for new staff who need to understand and run the system.