More than ever, financial institutions, their regulators as well as their shareholders are focused on the need to measure and meet risk-adjusted performance objectives, price products to reflect their true risk, and better understand how their institution is impacted by threats to liquidity, capital adequacy, and exposure to market rate volatility.
OFSAA Data Model (OFSAADM) is shipped with optimized data structures and pre-packaged data elements developed specifically for the financial services industry. OFSAADM is the foundation for the OFS applications. It provides the database structures necessary to support the individual business applications.
OFSAA Infrastructure is the foundation for OFSAA. It provides support for User Administration, Metadata Management, a Processing Framework, a Forms Framework and additional capabilities necessary to support the individual business applications.
Oracle Financial Services Funds Transfer Pricing is the industry's first and leading matched maturity funds transfer pricing application, enabling financial institutions to determine the spread earned on assets, from funding sources, and the spread earned as a result of interest rate exposure for each and every customer relationship. This enables accurate assessment of profitability along product, channel, and business lines, as well as the centralization of interest rate risk so it can be effectively managed. Oracle Financial Services Funds Transfer Pricing is fully integrated with Oracle's Financial Services Analytical Applications and shares a common customer account level data model.
The transfer pricing process isolates the four major sources of a bank's margin:
· The spread earned on assets
· The spread earned on liabilities
· The spread earned or lost as a result of interest rate exposure
· The spread earned or lost as a result of embedded options such as prepayments
Measuring and managing interest margin offers tremendous profit opportunities. By separating the components of net interest income, Oracle Funds Transfer Pricing isolates rate risk into your funding center where it can be centrally managed. In turn, business units are held accountable for what they can control: pricing and profitability. Armed with this highly accurate information, companies make solid, supportable decisions that lead to increased success in the marketplace.
Oracle Financial Services Profitability Management enables financial services institutions to calculate profitability by products, channels, segments, and even individual customers. These profitability calculations are adjusted for risk, and they drive Risk-Adjusted Performance Management (RAPM), an imperative for financial services institutions operating in this rapidly evolving and complex industry.
Isolating and analyzing business unit profitability is only the first step in building effective profitability management. To hold operational managers truly accountable for profitability, senior management must give them the power to identify the products that are profitable in each market segment, for each customer.
Together with OFSAA Transfer Pricing, OFSAA Profitability Management is the tool that delivers this power. Profitability Management links general ledger, account-level, and statistical data together to produce detailed financial statements for individual business units, products, and customers. Combining powerful modeling and disciplined accounting, OFSAA Profitability Management delivers complete, accurate, and inclusive profiles of profitability.
Oracle Financial Services Price Creation and Discovery is an interactive application that provides real-time transfer rates to support pricing loan transactions that reflect immediate market conditions. Risk-based pricing queries are directly integrated with the Oracle Financial Services Funds Transfer Pricing solution and leverage the same business rule logic. Query results incorporate all details of the underlying transfer price and include all elements of a product's profit and loss, including the allocated expense, expected loss, and capital charge.
Volatile market conditions and increasing regulatory pressures are placing greater demands on the risk management function. These stresses are driving financial institutions to review their current risk modeling and measurement capabilities. Yet, these circumstances also provide institutions with the opportunity to update technology solutions to systems fully integrated across the risk and performance spectrum. Departmental, one-off solutions are no longer viable alternatives in an environment where all systems need to work together.
Oracle Financial Services Asset Liability Management (ALM) helps financial services institutions measure and manage interest rate risk and liquidity risk, perform balance sheet valuations, and forecast both net interest income and net income. The Oracle Financial Services ALM solution has the ability to measure and model every loan, deposit, investment, and off-balance sheet instrument individually, using both deterministic and stochastic methods. This helps institutions gain a better understanding of the risks they have assumed and their sensitivity to changes in economic conditions.
Oracle Financial Services Balance Sheet Planning is designed to help financial services institutions budget for a full balance sheet and the associated profit and loss statement. Banks have a number of very unique needs when looking ahead. They must be sensitive to economic conditions, and create plans that not only forecast future performance, but also the forward risks they are assuming. Most importantly, they require tools that accurately forecast net interest margin. By accurately modeling the detailed and complex events on a bank's balance sheet, for both the current book of business and forecasted new volumes, Oracle Financial Services Balance Sheet Planning enables the delivery of accurate margin forecasts and comprehensive, meaningful budgets.
OFSAA Business Intelligence (BI) Applications are complete, prebuilt BI solutions that deliver intuitive, role-based intelligence for everyone in an organization—from front line employees to senior management—that enable better decisions, actions, and business processes.
For over 15 years, Oracle has set the standard for analytical applications in financial services. With our applications financial services organizations can achieve management excellence with a lower total cost of ownership, due to our integrated architecture, combining performance and risk applications into a single, seamlessly integrated framework.
In today's turbulent markets, financial institutions require a better understanding of the relationship between risk and return, while strengthening competitive advantage and enhancing long-term customer value. Oracle Financial Services Analytical Applications enable financial institutions to measure profitability and meet risk adjusted performance objectives, cultivate a risk management culture through transparency, lower the costs of compliance and regulation, and improve insight into customer behavior.