RiskTech100® Winner’s Profile: SAS

SAS is a leading provider of risk management analytics software, with more than 40 years of relevant experience. This year, the company secured RiskTech100® category wins for Risk and Finance Integration, IFRS 9 and FinCrime – Trade-based AML.

SAS’s solutions provide risk management analytics across industries in areas such as risk modeling and the decisioning lifecycle, integrated balance sheet management (including expected credit loss, ALM, regulatory capital and stress testing) and insurance risk management. Furthermore, SAS offers solutions in fraud and security intelligence, including fraud prevention, anti-money laundering compliance and counter-terrorism financing.

The company’s risk management solutions are based on SAS Risk Stratum, a centralized, unified risk and finance platform that helps to boost collaboration capabilities among business divisions. To learn more about how SAS’s risk and finance products address current market trends and underpin its RiskTech100® success, as well as the company’s plans for 2022, Chartis spoke with SAS’s Head of Risk Portfolio, Stas Melnikov.

Aiming at the future needs of the financial industry

SAS believes that industry trends are pushing banks and insurers toward a more holistic perspective, whereby they are increasingly leveraging data and analytics technology across the variety of risk (and finance) domains. For the company, the breadth and depth of its technology offering position it to help firms accomplish this.

Following the launch of SAS Risk Stratum, the company’s entire portfolio of risk management solutions has adopted the platform as a foundation. The main objective of the move to SAS Risk Stratum, says Melnikov, was to ‘make it easier for banks to use multiple SAS solutions in a single environment by allowing solutions to share data, models and scenarios in an “integrated by design” approach.’ On SAS Risk Stratum, firms can flexibly execute various risk and finance processes in an auditable and efficient manner while supporting regulatory compliance. The suite of solutions supported by SAS Risk Stratum includes components for stress-testing, CECL/IFRS 9, ALM, regulatory capital management reporting, IFRS 17, Solvency II and model risk management.

As a result, customers using SAS Risk Stratum can now benefit from a centralized repository of data, models, scenarios, rule sets, workflows (and more) that can be shared and reused for multiple business purposes. Models built for IFRS 9/CECL, for example, can be reused for stress testing, while data quality rules, standardized across risk and finance data, can be centrally managed. The key benefits of organizing solutions on a common platform include lower total cost of ownership, improvements in productivity, and greater consistency, transparency and auditability. 

SAS’s solution for IFRS 9, which was launched as part of SAS Risk Stratum, provides several notable enhancements for users:

• A simplified attribution analysis process
• Improved workflow capabilities
• An enhanced rules engine
• Updated disclosure reporting
• 360-degree linking
• Issues, action-plan and correspondence tracking

Melnikov notes that efficient and agile risk and compliance is the foundation for establishing a competitive edge in the current macroeconomic environment. ‘SAS’s product vision is clearly defined and is guided by several themes, including embracing open source, offering a unified framework for data preparation, model lifecycle management, deployment, execution and governance, and strengthening business continuity while accelerating firms’ adoption of new cloud-native technologies.’

Innovating to fight financial crime
Beyond risk and finance, SAS has begun to deploy its platform capabilities onto cloud-native architectures, making it easier for clients to modernize their strategies. The company’s emphasis will be on expanding the orchestration of data types to help institutions advance their entity resolution and identity strategies, given the push to digital transformation. SAS will look to continue to educate and enable customers on the adoption of machine learning and the automation of investigative processes to reduce the cost of compliance. For example, customer signatures have been expanded and optimized to incorporate additional digital and biometric features. The solutions also leverage real-time entity network generation (RTENG) to help clients identify counterparty and correspondent banking risks and apply network language generation (NLG) to autopopulate suspicious activity report (SAR) narratives.

For SAS, normalizing tools and reference architectures in support of fraud, anti-money laundering compliance and sanctions applications will enable its clients to consume SAS as a platform as a service (PaaS). Key to this strategy is orchestration and integration with operational systems, data enrichment providers, and open-source languages. And a comprehensive transformation of SAS’s risk and fraud product line-up is designed to leverage the latest innovations being introduced by the company’s cloud-native Viya 4.0 platform.

Looking ahead: a more integrated view

SAS is seeing a growing market need for a more complete and integrated view of risk and finance, a trend framed by rapid advances in cloud technology, regulatory and market drivers for a holistic approach to risk, and the need for greater agility in response to a rapidly changing environment. SAS has focused on addressing these needs for the past several years. ‘The release of our next-generation ALM solution earlier this year marked a significant step in our integrated balance sheet management solutions journey,’ says Melnikov. ‘This launch also introduced the newly built constellation of risk-specific microservices that will form the basis of our next generation of risk and finance solutions. Building on this strong foundation, we are planning to introduce further innovations in credit risk, regulatory capital and stress testing.’

SAS believes that several key differentiators will guide its future path:

• Open architecture designed for seamless integration of open-source and third-party libraries and models.
• A user experience that emphasizes modern, intuitive and responsive interfaces.
• Cutting edge performance and analytics.
• A cloud-native modular design built for resiliency and scalability.

As Melnikov notes, ‘we plan to reimagine risk management solutions for an open, modular technology paradigm, while focusing on the end user experience and ease of implementation and integration.’