Wednesday, 25 October 2017

Bank Islam Malaysia to build integrated risk framework on Kamakura risk management platform

Kamakura Corporation has completed an agreement to implement the Kamakura Corporation suite of solutions for Bank Islam Malaysia for its balance sheet management, funds transfer pricing, and liquidity management processes.

The project will involve the complete implementation of the balance sheet management and funds transfer pricing solutions and followed a comprehensive evaluation exercise involving a complete proof of concept. Dr Clement Ooi, EVP and Managing Director, Asia-Pacific Operations, Kamakura Corporation stated, "Bank Islam had a very clear understanding of its risk management and liquidity compliance needs. The vendor selection process had an extensive testing routine, and the Kamakura suite of solutions was an apt fit.

"Bank Islam not only has a range of intriguing products, but also a transaction volume that necessitated in them seeking a modular and integrated solution. The project will provide the bank with accurate assessment of transaction cashflows that can then be used for gap, duration, and mismatch management, as well as an accurate assessment of the margins associated with the transaction. All of these can be modelled based on different market conditions implying that the bank is prepared for any adverse movements in market conditions."

Dr Ooi said the Kamakura platform will be the basis for the bank's integrated risk framework. "The bank will be one of the first to be able to generate both historical and forward-looking views of the balance sheet, a transaction-level understanding of the profit margins and a good appreciation of customer, product, business unit, and organisational profit and value dynamics," he said.

Martin Zorn, President and COO for Kamakura Corporation said, "The successful implementation of the balance sheet management, funds transfer pricing, and liquidity compliance project in Bank Islam is a clear indicator that banks are no longer looking for fragmented solutions for risk and compliance, but seek to adopt a customised framework that allows for the repeated use of data loaded once for various aspects of risk and compliance. It is a testimony to the credentials of Kamakura's subject matter experts.

"Kamakura is well-positioned to meet the burgeoning regulatory demands imposed on financial institutions in the region and has the wherewithal to keep pace with regulation; as a matter of fact, what is currently being introduced as risk regulation has been available in Kamakura Risk Manager for the past 10 years."

Bank Islam, the first shari'ah-based banking institution in Southeast Asia, was established primarily to assist the financial needs of Malaysia's Muslim population, and has since extended its services to the broader non-Muslim population fulfilling its Banking-for-All principle. It provided technical assistance in the setting up of several Islamic institutions in the Asian region such as Indonesia, Thailand and Sri Lanka.

The bank offers 70 Islamic banking products and services to more than 5 million customers. Bank Islam's network in Malaysia consists of 147 branches and more than 1,200 self-service terminals. Primarily a retail bank with consumer banking constituting more than 70% of total financing, Bank Islam's list of products ranges from the traditional financing, savings and investment solutions for individual customers, to banking and financial solutions designed to fulfil the fast-changing financial needs of customers from all categories including those related to micro financing, wealth management, capital market, and treasury.