Diving Deeper

Make Big Data Smart Data (Part 1)

Enhance profitability, build new products, minimize exposure to risk, and deepen customer relationships by transforming your bank from a legacy organization into an information-based, data-driven enterprise.

Part 1: What’s the Forecast? “Regarding the weather, so much is said about it, but so little is done.” That familiar quip comes to mind as I think about data management in today’s financial services environment. An industry statistic that has received about as much play as the comment regarding weather is startling: while 90 percent of global data was created in the past five years, only 1 percent of it has been analyzed. The rest? It’s siloed into databases and file systems, hopefully secure, holding the secrets to critical insights that could translate into more profitable products, better customer...

Leveraging Data Infrastructure and Governance to Speed Model Development and Execution

Architected data platforms provide a foundation for automated modeling and forecasting to reduce cycle times and ensure well-managed data inputs.

Case Study: Architected data platforms provide a foundation for automated modeling and forecasting to reduce cycle times and ensure well-managed data inputs. The model development team at a Top 10 bank was responsible for forecasting on a $100 billion loan portfolio, but development efforts were often stalled by the complexity in data, and created compliance issues in the process. We implemented a data platform for providing authoritative and high-quality data to streamline the model development process and ensure the bank stays compliant and well-managed. Case Study: Leveraging Data Infrastructure and Governance to Speed Model Development and Execution

Agile is in Everything We Do

Beyond our credit-meets-technology expertise, part of what differentiates Flying Phase from our competitors is how we attack clients’ problems. Yes, the results stand on their own, but the way in which we get there – iteratively and with a focus on incremental value – plays a huge role in shaping the end result.

At Flying Phase, we take a different approach to tackling our clients' problems. Beyond our credit-meets-technology expertise, part of what differentiates Flying Phase from our competitors is how we attack clients’ problems. Yes, the results stand on their own, but the way in which we get there – iteratively and with a focus on incremental value – plays a huge role in shaping the end result. Whether in internal projects, our recruiting and marketing efforts, or our client engagements, Flying Phase brings an Agile approach to everything we do. Though born in software development, Agile has deep applicability across all...

Consumer Loan Defaults: Should Banks Continue to Hold Elevated Reserves?

Allowing for loan losses during COVID: Banks prepared for delinquencies during COVID uncertainty, but the expected wave of losses has not come. Will it?

Allowing for loan losses during COVID: Banks prepared for delinquencies during COVID uncertainty, but the expected wave of losses has not come. Will it? As states locked down, retail businesses were shuttered, and office workers who still had jobs learned to work from their kitchen tables via Zoom, credit analysts in the banking sector rushed to project the swell of consumer defaults on the horizon that would be driven by the COVID-19 pandemic. The reality is that, nine months later, chargeoff rates are stable and delinquency rates are down more than 15%. If the anticipated defaults never materialize, the result would...

Building an Efficient and Compliant CCAR Modeling System

Robust coding practices and streamlining the process and reduces delays and errors in model development and implementation for critical CCAR stress testing execution.

Case Study: Robust coding practices and streamlining the process reduced delays and errors in model development and implementation for critical CCAR stress testing execution. Complex and unreliable code, manual processes, and extensive back-and-forth with development teams made it difficult for a Top 20 bank to implement models required for the Comprehensive Capital Analysis and Review (CCAR), a federal stress-testing exercise. The existing environment resulted in delays, data issues and model revisions that put the bank at risk for non-compliance in submitting on time. Facing multiple pain points with that process, the bank tapped into our expertise and experience to develop a...

Productionizing Allowance: An Engineering Approach to an Analytical Process

Bringing production quality methods and controls to the quarterly impairment allowance created a fully compliant allowance process that reduced cycle time and resource needs by 80%.

Case Study: Bringing production quality methods and controls to the quarterly impairment allowance created a fully compliant allowance process that reduced cycle time and resource needs by 80%. Several analyst teams at a Top 10 bank spent four weeks each quarter estimating the company's consumer loan impairment allowance, which represents capital to be set aside for expected losses on the bank's $100 billion loan portfolio. Manual, spreadsheet-based processes were labor-intensive and error prone, leading to delays and reduced confidence in the results. With these issues contributing to audit findings and potentially tens of millions of dollars in excess allowance, the...

Automation of Monitoring in Field Operations and Calculating Incentives

Automation delivers higher accuracy and speed in $60 million in annual incentive payouts to telecommunication field technicians.

Case Study: Automation delivers higher accuracy and speed in $60 million in annual incentive payouts to telecommunication field technicians. Cumbersome manual processes caused errors and delays in distributing $5 million in monthly incentives at a major telecommunications firm, leaving operations field managers and technicians disappointed in an exchange that was intended to drive engagement and morale. Every month, four teams worked with multiple disparate spreadsheet tools to pull data and calculate incentives, an unwieldy and risky approach that took more than 45 days to process payments Recognizing the need to streamline and improve this critical function, the firm turned to...

Implementing CECL Part 2: Turning CECL Compliance into a Competitive Advantage

This post is the second in a two-part series on CECL. Part 1 explains the rationale for CECL and its implications on financial allowance practices.

NOTE: This post is the second in a two-part series on CECL. Click here for Part 1, which explains the rationale for CECL and its implications on financial allowance practices. As financial institutions prepare for the 2020 and 2023 implementation of CECL guidance regulations, most institutions have the same hurdles to overcome. We view these hurdles as strategic opportunities for the institutions that put the time and energy into understanding and developing the best solutions. Institutions are required to develop forward-looking approaches based on the materiality of their portfolios. While they might be able to rely on simple approaches for...

BLOG > EXTREME AUTOMATION

The Process Behind Process Automation

From EUCs to structured, automated data, we walk you through the process, best practices and change management to ensure you’re leveraging analysts’ skillsets to the fullest.

Since its introduction in September 1987, Excel has been the go-to resource in an analyst’s toolkit due to its versatility and capacity to quickly translate complex formulas into illustrative tables and charts. Over the ensuing years, a typical financial services analyst would build elaborate, interwoven spreadsheets, simple models, assumptions and calculations, all in Excel, creating end-user computing (EUC) applications. And while these EUCs built the foundation for modern automation, generally speaking, they lacked traceability or documentation, making model adjustments challenging and presenting serious challenges for governance, risk and regulatory compliance functions.