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.
To help financial institutions grow, manage risk, and optimize shareholder value, Oracle delivers a comprehensive, integrated suite of financial services analytical applications.
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 a standalone data warehouse with prepackaged data elements for the financial services industry. OFSAADM is also the foundation for the OFS applications. It provides the database structures 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 Pricing Management, Transfer Pricing Component 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 measures and models 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 net interest margin. 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 forecast and comprehensive, meaningful budgets.
Enterprise risk management (ERM) solutions span all areas of risk, including credit, market, operational, liquidity, fixed asset, business and reputation risk, enabling institutions to manage all their risks and provide necessary feeds for compliance-based reporting. The capabilities of Oracle Reveleus for risk management help financial institutions address compliance issues such as Basel II that demand a close operational synergy between finance and other business areas.
The Oracle Reveleus GRC (Governance, Risk, and Compliance) framework surrounds both the Oracle Reveleus and Oracle Mantas risk and compliance "point" solutions. It provides an end-to-end GRC solution that leverages a comprehensive data model and robust dashboard functionality. The framework facilitates a transparent view of all GRC-related activities across the enterprise, allowing senior management to identify and mitigate any operational inefficiencies that might potentially increase noncompliance risks or the overall cost of compliance.
Evaluating customer value is becoming tougher. Customer relationships are becoming more complex, involving several bank personnel, and have extended time periods. Increasingly, banks are customizing and personalizing products and services. While decisions are becoming riskier, time windows available for decision and action are becoming smaller. Such real-world scenarios mandate timely and comprehensive decision support. Oracle's Customer Insight solutions deliver targeted and actionable customer analysis that help financial institutions make quick decisions in a rapidly evolving marketplace.
Your System Administrator will provide you with a link through which you can access OFSAA Infrastructure. OFSAAI security ensures that every user is permitted access to screens based on his or her role. Roles are designed to provide access to standardized sets of application functionality that are needed by defined groups of users. For detailed information on seeded roles and on defining your own Roles, see the Oracle Financial Services Analytical Applications Infrastructure User Guide.
On accessing OFSAAI, the login screen is displayed.
Figure 1: Login Page
Enter your User ID, Password, and click Login. The first time you log in, you will be prompted to change your password.
You can also click the Change Password link in the login page to change your password later.
Figure 2: Change Password page
To change your password, enter your old password, enter your new password, enter your new password again for confirmation, and then click OK. Click Cancel to exit the Change Password page without changing the password.
OFSAAI passwords must:
· Contain at least 6 characters
· Contain a combination of numbers and characters without spaces.
· Be different from your 5 previous passwords
· Your User ID is locked after three consecutive unsuccessful logon attempts
· Passwords are case sensitive
· Passwords are displayed as asterisks (*) to ensure that the password is not revealed to other users
Contact your System Administrator if you encounter any of the following problems:
· Your User ID and password are not recognized
· You receive a message while logging in stating that your User ID has been disabled
After you log in to OFSAA Infrastructure, the Analytical Applications home page is displayed.
Figure 3: OFSAA Applications home page
Select Financial Services Profitability Management to open the Financial Services Profitability Management home screen.
Figure 4: Financial Services Profitability Management Application home screen
For more information on the application home page, see the OFSAA Landing Screen section in Oracle Financial Services Analytical Applications Infrastructure User Guide Release 8.1.0.0.0.