TL;DR: Analytics and AI leader SAS is expanding its collaboration with Microsoft to assist financial firms in navigating liquidity and interest rate risks following recent bank failures. The partnership leverages SAS Asset and Liability Management (ALM), powered by Kamakura Risk Manager on Microsoft Azure, offering advanced simulation and valuation capabilities. Chartis Research has recognized SAS as an ALM technology leader. This move follows SAS’ acquisition of Kamakura Corporation and a substantial investment in industry-specific AI solutions.
Reshaping the future of ALM technology
SAS, a pioneer in analytics and AI, is deepening its partnership with Microsoft to bolster financial institutions’ ability to navigate impending liquidity and interest rate risks. This collaborative effort utilizes SAS® Asset and Liability Management (ALM), enhanced by Kamakura Risk Manager on Microsoft Azure, enabling multi-period, scenario-based simulations and valuations for effective risk management, capital allocation, and balance sheet optimization.
Troy Haines, Senior Vice President and Head of Risk Research and Quantitative Solutions at SAS, emphasized the significance of these advancements, stating, “SAS is recognized for delivering best-in-class risk and finance solutions. Partnering with Microsoft to accelerate risk innovation in the cloud, we broaden our mutual reach and impacts, helping banks, insurers and other financial industry players mitigate and minimize risk in this persistently uncertain climate.”
The path to modernized balance sheet management
In response to escalating interest rates and stricter inflation policies, banks worldwide face challenges in managing liquidity. This scarcity and increased cost of liquidity necessitate a modernized approach. Financial institutions must optimize their data, analytics, and decision-making processes to enhance risk-adjusted profitability and adequately fund their liquidity risk strategies.
Bill Borden, Corporate Vice President of Financial Services at Microsoft, underscored the impact of SAS ALM on Microsoft Azure, stating, “SAS ALM on Microsoft Azure combines the power of both, supercharging the speed and accuracy of these metrics to help firms identify and capitalize on liquidity opportunities – potentially adding tens of millions of dollars to a bank’s bottom line annually at little cost.”