“Probability of default” analytics engine will be based on SAS technology
MILAN; Nov. 2, 2010 – SEC SERVIZI, a consortium of Italian banks that provides operational and technology services to financial institutions, has selected Accenture (NYSE: ACN) to develop and implement a new risk calculation engine to help its clients and members assess the probability of loan defaults. Such assessments are required under international capital adequacy rules. The solution will be based upon technology provided by SAS, the leader in business analytics software and service.
Probability of default (PD) is a measure of the likelihood that a borrower will be unable to make necessary scheduled repayments on a loan. Banks calculate PD for each customer based upon multiple factors – including the borrower’s credit history and assets and the nature of the bank’s investments and other factors. The calculation helps determine the amount of regulatory and economic capital a bank must set aside, according to published international banking capital adequacy standards, known as Basel II.
“Our new PD solution will help our clients and members improve their risk assessment capability and more rapidly and cost-effectively comply with current and future Basel Committee requirements,” said Luciano Dalla Riva, General Director of SEC SERVIZI. “With new analytic technologies, our customers will be able to create more sophisticated risk management models and translate complex and sparse data into easily accessible risk indicators. Accenture’s deep global expertise in risk management, analytics and Basel II implementation programs combined with SAS’ leading-edge analytics solutions makes the two companies ideal business partners for SEC SERVIZI.”
“The recent economic crisis and the worsening of credit quality highlighted the importance of a proper risk management organization”, said Andrea Dalla Vedova, a senior executive in Accenture’s Financial Services operating group. “High performing banks have come away understanding the new role that risk management must play to maintain a strong balance sheet and maintain the confidence of depositors, regulators, shareholders and other lending institutions. In order to better measure credit risk exposure, banks must adopt increasingly sophisticated predictive analytics tools and models. This new PD Engine, developed with SAS, can help SEC SERVIZI clients and members understand customer risk profiles and more effectively measure credit risk under Basel standards.”
SAS® Credit Scoring for Banking, which combines a robust scoring engine, flexible modeling environment, and a comprehensive banking industry data model to support improved risk assessment and adherence to regulatory requirements, will serve as the basis for the new PD engine.
“Through SEC SERVIZI, small and medium banks can now have the opportunity to use SAS software for addressing financial crisis concerns and helping with regulatory compliance,” said Marco Icardi, General Manager of SAS Institute S.r.l. in Italy. “This relationship empowers banks to be more competitive – both today and in the future, as new reforms, like Basel III, emerge.”
About SEC SERVIZI
SEC SERVIZI is a banking consortium, formed and incorporated in 1972 with the purpose of providing banking operations and technology services to members and customers. Thanks to a strong culture of innovation and a dedicated focus on technological excellence, SEC SERVIZI has evolved to become one of the premier providers of outsourced information services in Italy. With a broad customer base that grows significantly each year, SEC SERVIZI delivers highly innovative services including application and facility management, consulting, training and support.
Accenture is a global management consulting, technology services and outsourcing company, with approximately 204,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page is www.accenture.com.
SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions delivered within an integrated framework, SAS helps customers at more than 45,000 sites improve performance and deliver value by making better decisions faster. SAS has delivered proven solutions that drive innovation and improve performance since 1976. With consistent revenue growth and an unwavering dedication to helping customers make better, fact-based decisions, privately held SAS continues to provide organizations with THE POWER TO KNOW®.
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Sean K. Conway