KnowCo Ltd, a provider of risk management and compliance services and applications, has announced the release of major upgrades to its proven stress-testing and business modelling application, K-ALM.
“K-ALM V3 incorporates important, brand new functionality which will greatly benefit our user base, as well as consolidating all of the enhancements developed in the last 2 years since the previous major release,” said Dr Lise Land, Director of Software Solutions. “Product development, responding to both regulatory expectations and to client requests, is at the heart of our business – there is nothing more important to us.
“In 2010 we responded rapidly to banks’ needs for a solution to the new UK liquidity stress-testing requirements, with our KST stress-testing engine. That engine is still a vital component, around which we have built a truly impressive array of functionality for liquidity, credit and interest-rate risk, and for modelling business viability over the medium- to long-term. For example, credit risk stress-testing now incorporates both internal and regulatory credit concentration risk tests – the latter calculating the ‘HHI’ numbers and producing the required regulatory returns.”
IRRBB functionality now incorporates testing for basis risk, yield curve risk and optionality and repricing risks, and liquidity stress-testing now incorporates ‘Forecast LCR’ functionality, giving users the ability to test LCR compliance over future periods under a variety of scenarios.
“ICAAP, ILAAP and RRP submissions really do need to have all the dots joined up now, in terms of stress-testing and business modelling,” said Paul Ashton, KnowCo’s Managing Director and Head of Consulting. “All of that has to feed through into a coherent Risk Appetite Statement, with quantified limits and early warning signals and credible, documented monitoring and forecasting protocols.
“Building all of that on a foundation of user-developed spreadsheets is both time-costly and fraught with risk. Our regulatory know-how is fed into K-ALM so that, as well as replacing spreadsheets, the application speaks directly to regulatory requirements, including the requirement for banks to construct their own firm-specific tests, rather than simply tick regulatory boxes.”