i3 Consulting
Risk Management
Risk Management
  • Risk strategy, Enterprise risk management and governance

    The increased integration of financial markets across the world has brought risk management to the forefront as one of the most critical components of any business in current times. Risk strategy focuses on identifying the set of risks that an entity can/needs to assume in the given competitive environment and quantifying the amount of such risks to define the risk appetite. Boards of directors and officers must validate that there is comprehensive identification of risk and develop approaches that integrate risk management and governance processes. i3C can help CEOs, CROs, CFOs and boards design and improve risk strategies and risk management capabilities aimed at streamlining their governance and compliance programs, strengthen the quality of information for decision-making and improve the effectiveness of risk oversight. We can also help organizations design and implement practical enterprise risk management and governance structures that facilitate the deployment of the defined enterprise risk management frameworks.

  • Risk policy and process design

    Streamlined risk processes such as credit process, credit risk mitigation process, market risk management process, collection processes can help drive business growth while keeping the risk at acceptable levels. i3C helps its clients in designing these risk processes from scratch or suggesting the required changes in existing processes to ensure there is optimum balance between efficiency of process execution and right control and mitigation. Typical examples include designing SME lending processes and policies for a bank trying to grow SME portfolio or designing a trade settlement process for a brokerage company.

  • Account and portfolio risk measurement tools

    Credit risk measurement through probability of default (PD), loss given default models (LGD), Exposure at default (EAD), credit VAR modes or market VAR models to measure market risk are some of the key tools used in risk measurement in the banking industry. Similarly underwriting models, fraudulent claim prediction models, policy pricing models are some of the models used by insurance companies. i3C works with its clients on developing these statistical or simulation based models for precise risk measurement tools and prototype systems. These tools are customized for each of the clients based on their data infrastructure and demographic uniqueness of their customer bases.

  • Regulatory and compliance

    Financial services as a sector has increasingly being brought under regulatory supervision by government across the world. Banking, Insurance, Asset management etc. all are subject to regulatory supervision. i3C believes these regulatory regimes can also be leveraged by financial institutions in taking strategic advantages while fulfilling the regulatory requirements. i3C can help its clients understand the complex regulatory requirements in terms of reporting and compliance. i3C can develop tools for its clients for automating the generation of reports that need to be sent to the regulator.

  • Corporate risk management

    What risks company should assume i.e. which risks make sense for the company to assume, which risks should not be assumed and more importantly, how to manage the assumed risks." to "which risks company should assume ie which risks make sense for the company to assume, which risks should not be assumed and more importantly, how to manage the assumed risks.

  • Strategic risk management

    Should a metal mining company hedge commodity at FC risks? What type of hedges (neutral or active) it should make? What is the level of uncertainty in the strategic decisions the company is taking and what is the source of this uncertainty? All of these are important strategic choices companies make but they have little expertise in analyzing the possible impact of each move. i3C helps its clients in strategic risks management by using cash flow at risk (CFAR) technique and other stochastic modeling tools.

  • Corporate portfolio Management

    i3C can help its clients make informed decisions regarding corporate portfolio management which are much more aligned to enterprise risk-return perspective.

  • Market and credit risk management

    Various market factors such as interest rate movement, volatility of equity market etc exposes most of the companies to huge financial losses on its portfolio. i3C works with its clients in understanding and managing market risk and typically, VAR based tools and stochastic analysis are performed. Credit risk management includes analysis of customer, supplier and other contracts to understand potential risk in the contracts and advising on designing risk mitigants to manage such risks.

  • Operational risk management

    Operational risk is exposure to losses due to inadequate internal processes and systems and external events. i3C helps its clients diagnose and improve internal processes to ensure there are adequate and effective control measures defined to manage the various operational risks. Typical operational risk work includes design of standard operating procedures, design segregation of duty and authority matrix, setup management dashboards for quick and efficient decision making etc.

  • Banking
  • Insurance
  • Risk Strategy

    The aim of each company is to maximize the value provided to its stakeholders. The company faces uncertainty, and one of the most important challenges we assist the management in, is to determine how much uncertainty to accept as it strives to grow stakeholder value.

    We believe that uncertainty presents both risk and opportunity, with the potential to erode or enhance value. Our Enterprise Risk Management solution enables management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value through our consulting, process and training solutions.

    Our offerings for Enterprise Risk Management comprise of:

    Defining risk appetite and strategy – We help our clients to map their business objectives with the risks faced and quantify the risk appetite. The risk appetite is then used to evaluate strategic alternatives and set objectives for business segments of our clients. An optimal risk return strategy ensures value maximization for the client by efficiently and effectively deploying resources to achieve the vision of the company Formulating/ enhancing risk organization structure – We help fine tuning the existing risk organization structure to enhance effectiveness and independence of the risk management function Creating risk identification measures – We establish processes and frameworks to relate risks associated with each product and activity through factoring of internal and external factors Assessment of risks – We quantify the risks such as credit, market, operational, liquidity, interest rate risk through models which enable real time view of the state of business portfolio and riskiness Risk Control – We help in establishing/streamlining policies and procedures to implement the risk strategy of the organization. Processes such as credit process, credit risk mitigation process, market risk management process, collection processes have a positive impact on business as well as risk management Monitoring and reporting of risks – We create dashboards to assist the management gain an overall perspective on their risk portfolio in easy to use visual formats. Dashboards enable faster, reliable and automated flow of information and also generate customized reports depending on the needs of the client

  • Regulatory Compliance – Risk

    We provide advisory to our clients to help them achieve regulatory compliance by creating/validating disclosures and identifying and controlling regulatory risks.

    We have a highly experienced team of risk professionals who have helped multiple organizations with meeting regulatory compliance such as Basel implementation. We also provide advisory services in establishment of ventures in new jurisdictions, cost optimization for risk management systems and benchmarking against global best practices.

    We seek to generate business value while ensuring fulfillment of regulatory requirements in any scenario.

    We provide our risk regulatory compliance services in three main domains -

    Basel Implementation – We help our clients prepare for Basel 2 compliance (Standardized and Advanced), including preparing people, systems and processes. We help create best in class processes for capital calculation and planning along with policy implementation for effective risk management. We also assist our clients in preparing ICAAP disclosures and all supervisory discussions Modeling – We create automated tools for our clients to help them measure credit, market, operational, liquidity and interest rate risks. We create both standardized models and advanced models like EAD, LGD, PD and VaR tools and also help our clients create data infrastructure to support the models Validation – We also assist our clients in independent validations of risk models and ICAAP disclosures. Our service for model validation comprises of review of modeling assumptions, computational aspects, parameter calibration, data sources and best market practices

  • Risk Analytics

    We provide analytics driven insights to our clients on all major risk types for products as well as strategy development. We also help in data management and improving the speed and insights of the reporting mechanism. Our solutions involve using new or existing models in a synchronized manner to generate results at detailed as well as at a firm wide level.

    Our main areas of assistance are -

    Creating impact study for different strategies being deliberated by the management Analyzing risk – return for all business segments Create single data repository compiling information from internal as well as market sources Provide analysis of historical data to generate business insights Assess capital requirements, FTP, risk adjusted return and other parameters

  • Risk Strategy

    We help our clients in optimizing returns on their capital by identifying key drivers that could be used to maximize returns. We provide analysis of impacts of change in key drivers such as risk appetite, capital level, reassurance, ALM and asset allocation. Our models enable estimation of probability of various events and are used to arrive at optimal capital planning.

    i3 Consulting also builds models to identify risk classes that will have maximum fat tail and will be worth reinsuring. Quantifying the reduction in economic capital requirement by reinsuring risk classes is also provided along with identification of right price for purchasing reinsurance.

  • Risk Analytics

    Risk management is very important for insurance industry as they themselves take over risks from customers. Every quantifiable factor is therefore an important tool which can be used to develop profiles of high and low insurance risk which determine insurance premiums and hence the business generated while covering acceptable amount of risks.

    We assist our clients with our analytical capability for efficient and correct claim processing and also for product development.

    Analytics help identify potential fraudulent claims like up coding, unbundling, double billing, false billing and overstated claims. We profile the client’s fraudulent claims and use historical data to predict potential fraudulent claims. These claims can then be scrutinized in greater detail providing our clients with effective focus.

    The analytics can also be used to assess performance of field agents / surveyors on various KPIs such as time and volume through easy to use dashboards. These results can be used to define optimal process time and flow.

    Our product development analytics help assess the risk based on the features designed in the new product developed through various methodologies i.e. statistics, simulation etc. We take advantage of our deep statistical expertise to provide specificities of risk and pricing that help shape products.

  • Risk Assessment

    i3 Consulting helps its clients introduce more scientific approaches in overall underwriting process. Our solution incorporates combination of data mining and predictive and behavioral models to assess frequency and severity of claims. We use clustering, regression modeling and decision trees to predict frequency and value of claims to identify risk associated and potential payouts.

    The business benefits by obtaining improved risk-adequate pricing of individual loans, avoiding adverse selection and provides guideline on business expansion without risking profits. We provide automation of operational decisions which improves quality as well as reduces costs. Our analytical models also provide capital requirements and recommend optimal allocation. The models help the client measure and manage insurance wide risk and reduce portfolio EL.

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