Let's succeed together

ALM Partners’ asset and liability services include unique solutions to support business development, net interest income optimization and interest rate cover, and comprehensive balance sheet risk management. We offer the following financial risk management skills, modelling and services: interest rate risk management, liquidity and funding structure management, credit risk modelling, solvency and capital adequacy assessments, as well as IFRS 9 modelling solutions for expected credit loss (ECL) and hedge accounting. Please find more information about our services below.

Interest risk management

Interest rate risk management is modelled based on the operator’s interest-bearing business, the interest income and the expenses it generates, and the interest rate and market valuations of the interest-bearing items. Changes in the market value of net interest income and interest rate-related business are analysed by different interest rate scenarios and business and customer behaviour. Based on modelling and reporting, the current and targeted optimal risk-return position is assessed. The interest rate risk position can be influenced, for example, by interest rate hedges, changes in the structure of investments, or changes in the entity’s own product.

For interest rate risk management, we fulfil the European Banking Authority’s (EBA) most extensive banking requirements for interest rate risk management / IRRBB (Interest Rate Risk arising from the Banking Book). Modelling and reporting requirements depend on the size of the bank, and our services and produced models can be scaled based on bank size requirements and jointly identified modelling features based on business benefits. Similarly, we are specialists in the modelling and pricing of trading book interest and other risks, helping our clients to meet the Fundamental Review of the Trading Book requirements.

We at ALM Partners model and analyse the development of interest income and the associated interest rate risk. We help financial institutions to respond to all interest rate risk questions, such as what is likely to be the net interest income in the next calendar year under different market conditions, and how and by what measures interest rate risk, interest rate positions and their predictability can be further improved.

Liquidity management services

We offer modelling, reporting and expertise on liquidity and financial structure. Liquidity modelling and reporting can be used to monitor current inflows and outflows, including the behaviour of cash flows in different interest and customer behaviour situations. Modelling can be carried out in accordance with the present balance sheet as well as including forecasts for the entry and exit of the planned new business, for example, new loans to be granted with the repayment program. Liquidity services bring predictability to cash flow and financial structure. At the same time, the planned liquidity level will be ensured, as well as the fulfilment of regulatory requirements for liquidity and financial structure (LCR banks and NSFR, etc.). In the optimisation of the liquidity buffer, the aim is to optimize the level of liquidity reserves to the desired level and to seek to direct the funds exceeding this level to productive business use.

Our services include liquidity modelling and calculation on the contractual level (individual credit / deposit level). In addition, we implement liquidity and financing strategies and, in cooperation with banks, implement internal liquidity management processes (ILAAP) with reporting. Furthermore, we produce banking reporting for the banks’ liquidity area (LCR, NSFR, ALMM).

Credit risk modelling and capital adequacy

As part of our asset, liability and capital management services we provide support in credit risk modelling and implementation of different solutions based on our customers’ individual needs. Furthermore, ALM Partners offers capital planning (ICAAP) and stress-testing to support in capital adequacy assessment.

IFRS 9 -modelling solutions

We provide our customers with IFRS 9 -modelling solutions. We offer support in the implementation and credit loss provisions of IFRS 9, from the asset and liability viewpoint. These services include, for example, expected credit loss (ECL).  We handle ECL modelling, monthly calculations, as well as the continuous development of ECL based on our customers’ needs.

As part of our IFRS 9 -solutions we also offer hedge accounting services, which includes hedge account modelling, monthly calculations, and continuous development as per the customers’ needs.

ALM Partners offers innovative and modern data analysis and database expertise. Our services include modelled data warehousing, visualisation of data, data quality assurance, and flexible business and risk reporting. In addition, we invest in artificial intelligence (AI) and machine learning to ease our customers’ daily life.

By combining our services, we can tailor solutions for our customers’ individual needs. We use modern tools in our work, and we are familiar with different banking systems. We are an easy and reliable partner in system changes with our consultants being in architect, developer and project manager roles, depending on the customers’ needs.

Modelled data warehousing

The amount of data is constantly increasing, however, using the data to support business may be challenging. It is important to find the relevant data for business and transfer form it into an easily understandable form. We have vast experience in banks’ data warehouses and its development, and we assist our customers in utilising the knowledge to business development.

Modelled data warehouses support business and leading with data. By using data warehousing, different information systems may be integrated into a single database, organised and processes as a source of information for other applications. We offer solutions that include data modelling and system implementation.

Data quality assurance

Quality assurance aims at measuring and developing data quality. Often the term used for quality assurance is testing. We assist our customers on all stages of quality assurance: we optimise our customer’s testing process and create functional solutions for maintaining quality assurance. When quality assurance has been implemented correctly and with modern methods, system development costs can be considerable reduced, systems can be deployed faster, and data quality problems can be resolved as soon as they occur.

Quality and measurability are the foundation of business decisions. Decision-making must be based on the company’s strategic business objectives. ALM Partners’ data quality assurance services facilitate decision planning and business strategy development. Our services include ALM Partners’ developed Difference Engine application, which reconciles data automatically and compares it with the different systems, and Robot Framework. This eases any development projects by utilising automatic testing.

Business and risk reporting

Analytics help us understand the phenomena behind data and find answers to business issues. Predictability is an important part of business and future scenarios, that can be perceived using statistical methods. For risk management, it is important to identify the key drivers for minimising or optimising credit and liquidity risks.

Analytics and reporting guide better decision-making, help identify risks and new business opportunities. We help our customers to visualise and analyse data, and to transfer the analysed results into business operations, so that more efficient resource allocation and sales processes can be planned. This ensures an even better customer service.

Machine learning and predictive analysis

ALM Partners continuously invests in learning and implementing future technologies. In our analytics solutions we utilise machine learning algorithms, which can be used to improve the interpretation of data and create predictions based on customer behaviour. Machine learning, artificial intelligence, and predictive analytics are often synonyms for each other, but all these can be linked to data analytics.

Artificial intelligence and machine learning can both greatly enhance several processes, provide new information, and increase predictability. We provide support, for example, in building customer behaviour models, which can assist in anticipating payment defaults and changes in a customer’s profitability class, as well as discover new customers and niche markets.

Open Banking

The entry into force of the Payment Services Directive (PSD2), banks must provide external service providers access to the bank account information of customers, with the consent of the said customer. Open Banking provides customers with an opportunity to view their own financial situation from various banks, and for the banks the possibility to offer a way to handle transaction data mechanically. This saves time and resources for both the customer and the bank. Our services regarding Open Banking include the retrieval of data from bank interfaces and its compilation to data warehouses, classification of transactions, and the implementation of automatic credit decision tools using open interfaces provided by banks.