毕博上海银行咨询To-be-Deliverables Chap3_k.ppt

Table of Contents,1Executive Summary2Background&Overview3Commercial CRMS“To Be”Process Model,Design Requirements&Work-Plan4Retail CRMS:Objectives,“To Be”Components,Process Improvements&Work-Plan5Commercial CRMS Process Improvements6Plan Sign-Off&Next Steps 7Appendix,1.2.3.CRMS“To-Be”,4.CRMS:,“To-Be”,5.CRMS 6.7.,3.1 Overview:This chapter provides a detailed overview of Commercial CRMS:It is divided into four sections:“To Be”commercial CRMS background:Background:Objectives of Commercial CRMSOverall vision for Commercial CRMSUsers&functional roles&responsibilitiesComponents of Commercial CRMSBenefits of Commercial CRMS“To Be”process functional design:Proposed process implications connected with Commercial CRMSDetailed process mapsCRMS modules-Overview of functional analysis:(Appendix I)Description,business use case analysis,calculation&outputs&high-level design requirements&considerations,Commercial CRMS:Overview,3.1.CRMS 3.-“To-Be”*-CRMS-CRMS-,-CRMS-CRMS*“To-Be”-CRMS-*CRMS-(1)-,3.1 Overview:Continued“To Be”IT model&approach:System architectureApplication architectureData flow architectureDetailed Commercial CRMS work-plan:TasksMilestonesDeliverablesDependencies,Commercial CRMS:Overview,3.1.()-“To-Be”IT-CRMS-,3.2.1 Overall Objectives of Commercial CRMS:CRMS is designed to enable better analysis of credit risk across the organization from“front to back”for substantially improving monitoring&decision-making to provide the Bank with more transparency for credit risk.For Example:Detailed marketing&risk-related information-for example access to KIS Line data for 3000 users within the bank who deal with customers&assess credit riskEnhanced decision support-provides improved credit analysis tools&quality data in the hands of both branch&loan center credit officers New tools for new functions-placement of new&improved tools in the hands of functions like Loan Review&Portfolio Management,Commercial CRMS:Background,3.2.1 Overall Objectives of Commercial CRMS:CRMS.,.:-3000 KIS line date-tool-Loan Review.,Commercial CRMS:Background,Commercial CRMS:Background,3.2.1 Overall Objectives of Commercial CRMS:cont.Substantially improved monitoring&decision-making capabilities leveraging international best practice-providing Hanvit Bank management with more transparency for credit risk.Enhanced competitive position through faster,higher-quality credit decisionsImproved data quality for use with advanced query&reporting tools to support continuous improvementsCRMS is designed to provide fundamental improvement in Hanvit Banks ability to identify,measure,manage&mitigate credit risk exposureIn summary,CRMS is designed to provide fundamental improvement in Hanvit Banks ability to identify,measure,manage&mitigate credit risk exposure,3.2.1 CRMS()*,.*.*CRMS exposure,CRMS exposure,Commercial CRMS:Background,3.2.1 More Specific Objectives of Commercial CRMS:Expanded risk analysis capabilities for analyzing detailed borrower financial behaviorBetter methods for projecting borrower financial,industry&group impacts&assessing collateralEnhanced scoring&rating focused on measuring default potentialAutomated use of detailed non-financial borrower informationEstablishment of more specifically determined credit limitsImproved risk-adjusted performance measurement for individual loan transactionsAbility to analyze aggregate credit exposures across loan&bond asset classesCapability to analyze overall loan portfolio on a value-at-risk basisProvide quality information for credit review,3.2.1 CRMS-,-scoring rating-VaR-,3.2.2 Overall Vision of Commercial CRMS:The overall vision for CRMS includes supporting refined credit risk processes“front-to-back”with improved analysis&decision-support tools:,Commercial CRMS:Background,3.2.2 Overall Vision of Commercial CRMS:The overall vision for CRMS includes supporting refined credit risk processes&workflow“front-to-back”with improved analysis&decision-support tools:,Commercial CRMS:Overall Vision,3.2.2 CRMS*CRMS.,3.2.2 Overall Vision of Commercial CRMS:Enabling this vision for enhanced credit analysis&decision support requires an integrated CRMS data-mart:,Commercial CRMS:Background,3.2.2 Overall Vision of Commercial CRMS:Enabling this vision for enhanced credit analysis&decision support requires an integrated CRMS data-mart:,Commercial CRMS:Overall Vision,3.2.2 CRMS*CRMS data mart.,3.2.3 CRMS User Groups:Commercial CRMS supports better decision making throughout credit risk management process.The potential direct users of CRMS include:Branch&HQ marketing teamsRelationship managersBusiness analystsCredit officersSenior/Junior credit officers committeesIndustry/group specialistsLoan review teamsWorkout&problem loan teamsPortfolio managersInternal AuditorsSenior Executives&LOB management will also be indirect users through the detailed reporting capabilities of CRMS.,Commercial CRMS:Background,3.2.3 CRMS:*CRMS.-RM-/-/-loan review-WORKOUT-*CRMS CRMS.,3.2.3 Potential Users Population:,Marketing&KIS Misc.Information,Total Users:(1)Branch(2)HQ,(1)Peak(2)Average,FinancialAnalysisSuite,PortfolioManagement,PricingCollateralLimits,12501000250300100,1001051,12501000250300100,30002500500300100,Commercial CRMS:Background,3.2.3:,KIS,:(1)(2),(1)(2),Portfolio,Pricing,12501000250300100,1001051,12501000250300100,30002500500300100,Commercial CRMS:Background,Commercial CRMS:Background,3.2.4 Overview of Commercial CRMS Roles&Responsibilities On a functional basis,successful implementation of Commercial CRMS requires clear establishment of functional roles&responsibilities relative to the users groups defined aboveThe following chart highlights the core credit risk decisions&the responsible functions within the Commercial CRMS vision,3.2.4 CRMS CRMS.CRMS.,3.2.4 Commercial CRMS Roles&Responsibilities,Commercial CRMS:Background,3.2.4 CRMS,Commercial CRMS:Background,3.2.5 System Components:The CRMS system will have 9 decision support modules,custom designed by KIS Financial Analysis*Shenanigans*Forecasting*Sensitivity*Scoring/RatingCollateral AnalysisLimits AnalysisPricingPortfolio ManagementAdditional capabilities to support marketing,industry/group analysis&early warning(default prediction)are also under consideration as formal modules*The design effort also includes a data entry&capture module to support the four financial analysis modules which KIS refers to as“Credit Analysis”,Commercial CRMS:Background,3.2.5 CRMS 9 KIS KPMG BP.-Scoring/Rating-Pricing-,/()*KIS“”4 capture module,3.2.5 System Components:continued.Underlying data-mart to enable analysis&decision support capabilities using Hanvit Bank query programs or industry standard query&reporting toolsCapability to access extensive external data&information via KIS line,Commercial CRMS:Background,3.2.5:()Data-mart:query query reporting tool.KIS line access,3.2.6 Benefits of CRMS:The overall benefits of Commercial CRMS include:Ability to identify&focus marketing effort on high-value customersBetter risk-reward decisions at the inception of a commercial loanFaster response to deteriorating borrowers to mitigate potential lossesThe potential to manage non-performing loans more closely,which helps to reduce provision requirements&helps reduce write-offsCredit pricing support for improving the overall credit product base to compete in the evolving international business lending marketEnhanced credibility with regulators&shareholders by assisting fulfillment of credit risk related MOU requirements,Commercial CRMS:Background,3.2.6 CRMS*CRMS:-,-credit pricing-MOU,3.3.1 Detailed“To Be”Functions Design:OverviewIn this section we highlight in more detail the primary components of the“To Be”functional design&briefly highlight the impacts expected for each areaWe highlight the overall analytic applications proposed for use in CRMSWe also highlight the underlying processes for:Business planning/development:including industry,group&company researchRisk assessment,approval&origination:analytic support for financial analysis,shenanigans analysis&forecasting/sensitivity analysiscredit analysis&decision support for scoring&rating,collateral assessment,limits&pricingEarly warning,monitoring,review&workout:including collateral re-valuation,ongoing analysis,re-scoring&re-rating,collection&recoveryPortfolio management:including VAR&portfolio reporting,Commercial CRMS:Detailed“To Be”Functional Design,3.3.1“To-Be”:*“To-Be”.*CRMS.*.-/:,-,:,/.:scoring rating,pricing-,Monitoring,Review Workout:,re-scoring re-rating-:VAR,3.3.2.1 Impact of CRMS“To Be”Solution on-Marketing:Creation of a central repository of customer Reduced loan losses through focused customer monitoring for earlier identification of potential loan problems.Ability to pre-qualify potential clients using KIS provided financial data which allows effective“first call”new customer interviewsRecommendation for adoption of industry standard query&reporting tools for ease of data access by non-IT professionals Introduction of Branch Lending Specialists program for more customer efficient commercial lending coverage,Commercial CRMS:Detailed“To Be”Functional Design,3.3.2.1 CRMS“To-Be”.RM:-KIS IT,3.3.2.2 Impact of CRMS“To Be”Solution-Credit Analysis:Faster&more accurate credit decisions through use of the KIS modulesAutomated alerts to problems in financial statements through KIS modulesAbility to properly analyze specialized industry financial statementsAbility for more accurate cash flow analysis for proper credit limits settingEnhanced ability for information dissemination under Key Bank programDocumentation of credit analysis opinions to prevent undue influence of senior bank managers on credit decisionsCentralized,industry&group analysis accessible by relationship managers&credit officers for greater consistency&support in credit review&rating,Commercial CRMS:Detailed“To Be”Functional Design,3.3.2.2 CRMS“To-Be”KIS KIS RM rating,3.3.2.3 Impact of CRMS“To Be”Solution-Customer Loan Scoring&Rating:Substantially improved accuracy in delineating risk which translates into better loan pricing&fewer marginal creditsImproved risk adjusted bank earnings though:Increased acquisition of superior credits Reduced reliance on marginal credit accountsAbility to pre-score company financial statements to prioritize Credit Review schedule towards lower quality creditsCredit rating capabilities for more accurate Credit Review decisions including both borrower&facility ratingsRisk scoring system driven by a sophisticated statistical modelRisk scores&ratings calibrated to defaultCredit ratings process aligned with international best practices&ratings aligned with FSC classifications,Commercial CRMS:Detailed“To Be”Functional Design,3.3.2.3.CRMS“To-Be”solution scoring rating credits-credit accounts F/S.facility ratings rating calibrated score ratings FSC Credit ratings,3.3.2.4 Impact of CRMS“To Be”Solution-Loan Pricing&Structuring:More accurate pricing&loan value computation using sophisticated ratings transitions methods to measure credit riskDirect measurement of the risk adjusted value contribution potential of each individual loan using NPVIncorporation of both expected&unexpected loss factorsCapability to run“what-if”scenarios on some components of loan structureStrengthening of methods for Loan Covenants to enhance Hanvit Banks ability to control borrower behavior&help avoid loan losses,Commercial CRMS:Detailed“To Be”Functional Design,3.3.2.4 CRMS“To-Be”solution-Structuring Ratings transition method Pricing NPV/“What-if”,3.3.2.5 Impact of CRMS“To Be”Solution-Credit Review&Approval:Streamlining of credit analysis process by combining certain business analyst work processes with credit review officer functionsEnhanced Junior Loan Committee structure to provide for fair&accurate loan approval decisions through:Random assignment of officers to each Junior Loan CommitteeExpansion of number of members from 3 to 5Credit Review Officer doing review does not have a vote in approval processAbility to assess total customer or group exposure during credit review process,Commercial CRMS:Detailed“To Be”Functional Design,3.3.2.5 CRMS“To-Be”solution-3 5-total exposure,3.3.2.6 Impact of CRMS“To Be”Solution-Loan Review:Implementation of a comprehensive Loan Review function for independent verification of quality of credit approval&monitoring assigned Risk Management Independent assessment of whether credits should be assigned to Workout or Problem Loan DepartmentsDirect notification from Loan Review function to a high-level committee of the Board on lack of adherence to policy&failure of bank officers to adequately assess&monitor credit qualityAdjustment of credit rating based on Loan Review resultsIdentification of problem officers,branches or procedures which adversely impact loan qualityIndependent assessment of the allowance for loan lossLoan Review provides an secondary early warning mechanism of problem loans,Commercial CRMS:Detailed“To Be”Functional Design,3.3.2.6 CRMS“To-Be”solution-Loan review monitoring Loan Review Workout,credit quality Loan Review Loan Review Credit Rating,3.3.2.7 Impact of CRMS“To Be”Solution-Analyze&Manage Portfolio:Longer term strategic view of target portfolio&risk acceptance criteria to support credit planningLoan loss avoidance through proactive change in risk acceptance criteria&adjustment of loan portfolio mixMore accurate credit exposure management through ability to aggregate loan data&analyze concentrations by geography,industry,size or other criteriaProvides a framework for analyzing impact on the loan portfolio of changes in the economic environmentAbility to comply with&accurately report to regulatory agencies on compliance with lending emphasis programs like increased loans to SME sCapability to calculate portfolio VAR for improved bank earningsAbility to quickly assess impact on the bank of adverse changes in currency,country,industry or other economic conditions,Commercial CRMS:Detailed“To Be”Functional Design,3.3.2.7 CRMS“To-Be”solution-,credit,exposure VAR,3.3.3.1“To Be”Functional Design:High-Level Process OverviewThe“To Be”model is presented in detail in this section as follows:The overall process flow(large arrow)illustrates the loan process from Marketing through Credit Analysis&Administration to Collection&Portfolio ManagementThe detailed boxes show in detail,the processes&applications relevant to each step in the process&the users of each processEach process is numbered for clarity,P1,P2,etc.The applications which support each process are numbered A1,A2,etc.Finally,each information element maintained or processed by the IT system supporting the“To Be”process is also identified with numbers I1,I2,etc.which correspond to the Process&Applications which rely on those information elements.,Commercial CRMS:Detailed“To Be”Functional Design,3.3.3.1“To-Be”:“To-Be”-(),-application,-P1,P2-applicationA1,A2-IT element I1,I2,element Process Application.,Credit,Analysis,Loan Pricing&,Structuring,Credit,Submission,Credit Review&,Approval,Loan Review/