Standard Chartered Bank has been awarded IDC’s “2021 Smartest Bank in Asia” award for its Scenario Based Analytics Platform (SBAP) by IDC Financial Insights at its annual Financial Insights Innovation Awards 2021. The solution not only meets the demands of increasingly challenging stress test requirements but also excels in its scalability across other use cases.
In partnership with SAS, the leader in analytics software and services, the Bank built a robust stress testing platform that started out as a tool for regulatory compliance, and has been expanded to assess the impact of crisis scenarios on its future P&L and balance sheet. Standard Chartered Bank’s efforts in building a competitive advantage around risk analytics and intelligence are a key element of their success in digital transformation.
Standard Chartered Bank’s initiative was among the 100 high-quality entries submitted for this award by leading banks across the Asia/Pacific (excluding Japan) or APEJ region. This year, there are fifteen winners.
Each year, IDC Financial Insights invites financial services organizations across Asia/Pacific to nominate the initiatives that they believe warrant special recognition in the area of innovation. The FIIA recognizes the successes of these institutions in displaying innovation to realize business objectives.
These initiatives are measured by the FIIA Assessment Panel (made up of IDC Financial Insights analysts and an independent panel of industry practitioners) against a rigorous set of matrices that look at responsiveness to market needs, effectiveness of rollout, and market take-up and sustainability.
According to Daniel Gelinas, Head of Stress Testing Strategic Programme, one of the major reasons for choosing SAS as the main vendor for the SBAP project was that the SAS solution allowed for easy integration with other tools and software in the market. The Bank’s principles of openness to running models on many programming languages aligned their stress testing solution with what SAS is doing with its analytical platform. This laid the foundation for a strategic partnership. Another key reason for selecting SAS was its advanced technology tools, particularly on the software’s ability to connect risks to finance data.
According to Gelinas, choosing SAS as the correct technology partner was crucial in allowing the stress testing platform to continually adapt and grow on its transformation journey. The Bank is currently migrating the SBAP to a centralised and more powerful second generation, with plans to gain greater efficiency in managing data. There are plans to make the platform available to as many as 20 regions, entities, and countries by the end of 2021.
The SBAP was initially built for regulatory stress testing but is now doing much more for the Bank. The platform is not only able to calculate impairment cost created by a crisis, it can also project its impact on the Bank’s financial statements for specific future periods in time.
Gelinas said, “For the first time, we have a process where the risk and the finance numbers across the organisation are integrated and optimised. The platform allows us to run all the models for balancing revenue with the risk profile within the organisation as fully integrated.”
The output is a full balance sheet projection and P&L statement for each of the forecast period. This means that scenario planning for a five-year period will provide the team insights into how much profit can be expected each year. With this, Standard Chartered Bank can fulfil its ultimate goal of stress testing: to ascertain the sustainability of the Bank over its capital funding position.
SAS Vice President for ASEAN Remco den Heijer said, “Working with Standard Chartered Bank to create a comprehensive stress testing capability for the whole Bank has taken less than three years, and we are looking forward to continuing our partnership with them as we expand the solution into the next generation. We are aiming to gain greater efficiency in managing data and will be working with them to make the platform nimbler, to run faster, be more elastic, and be cloud native.”
“The SBAP is a key example of getting the best out of scalable technology innovation that factors in the consideration of future roadmaps and business objectives around risk analytics. As we assessed the submissions of this year, we recognise that digital transformation journeys are becoming more distinct. The role of technology vendors like SAS extends beyond that of merely being a service provider, to also playing a key role in taking ownership over Standard Chartered Bank’s journey and working collaboratively with the business to grow their technology capabilities and implementation across a wide range of use cases. The Bank’s continuous transformation strategies in partnership with SAS, along with their commendable achievements in the SBAP project reiterates their standing as Asia’s Smartest Bank,” says Darshiniy Selvaratnam, Program Director of the FIIA Awards.