Investment Management company headquartered in the USA and Multinational presence.
Business Requirement :
Entity manages investment with a value of USD 2 Billion across 66+ countries. All critical financial information to assess the performance and Risk of their investees were collected and maintained manually.
Their current practice was to present reports using PowerPoint and Excel for their Investment Committee. Any questions raised on What-if scenarios and detailed drilled information in the meetings were difficult to explain using excel data files. A solution to automate assessing the Completeness and Accuracy of data collected from Investees and then automatically link it to Final dashboard reports was placed before the Management.
Identified Process Challenges :
Information for each Investee was collected in Manual excel sheets and hence had issues on Completeness, Accuracy and non-availability of data within excel files.From the start point of data collection till reporting of KRI’s and Classification of Investees, each Investment Manager had to spend nearly a week of their time, and sometime this could be in the higher side of 1.5 – 2 weeks. The Risk Management team monitoring all funds had to communicate and collect information from the Investment manager on an Adhoc basis, and this can result in a delay to take necessary decisions for an identified risk. During the current COVID-19 crisis, the team realised the need for an automated solution.
Approach and Solution Design :
We supported the client in standardizing the Spreadsheets from various Investees in to and Single record source.
We design a Logical engine for Validating the data received for various aspects including completeness, Accuracy, Integrity, Spike in values, missing data, etc. The exceptions noted in the analysis were provided in a “Data Validation” dashboard and made accessible respective Investment manager.
All validated data was then used as a basis to assess various Key Risk Indicators monitored by the entity. Then the Manual Risk levels determined by the entity at different levels of Sector, Currency, Industry, etc. were linked to Investee specific risks, and an Overall Investee Classification was assigned.
Using all the above information, a Comprehensive KRI and Risk Dashboard was designed and deployed providing information as and when a Validated data was updated.
Business Benefit and Result :
Average time from collection of data from Investee to reporting to Investment Managers was reduced to a week. The benefits of the solution have also helped in timely decisions through alerts.The Dashboards had the following benefits:
- Consolidating the KRI’s / Risk Classification for each Investee and present it automatically for various levels of consolidation.
- Trend analysis and What-if scenarios that were made available for Key criteria’s enabled the Investment managers to plan and also respond to queries during critical meetings.
- Dynamic targets were defined to allow for better assessment instead of traditional benchmarks/target set for a Quarter / Year.