Asset Liability Management

Integrated ALCO Reporting Covers Net Interest Income (NII), Economic Value of Equity (EVE), Duration, and Earnings at Risk (EAR), with the Ability to Apply Both Parallel and Non-Parallel Shocks. Vector Performs Comprehensive Interest Gap Analysis, Calculates the Hedge Ratio, Enables Detailed Balance Sheet Examination, Optimizes Hedging Strategies, and Ensures Compliance with Regulatory Requirements.

Automated ALM for Superior Risk Management, Liquidity Planning, and Balance Sheet Optimization

Lenders • Debts Funds • Banks

Scale Your Lending, Not Your Operations

Vector Goes Beyond ALM Reporting by Providing Actionable Insights for Balance Sheet Optimization, Risk Management, and Asset-Liability Structuring, Empowering Financial Institutions to Enhance Stability and Profitability.

300

Financial Models

+45%

Increased Accuracy

80%

Time & Cost Saving

Asset Classes

ALM Features

360° Reporting and Analytics

Interest Rate Risk (IRR) or (IRRBB)

Vector ML Analytics Equips Banks With Tools to Measure, Analyze, and Manage Interest Rate Risk (IRR), a Critical Aspect of Asset-Liability Management (ALM) Affecting Profitability and Financial Stability. As Interest Rates Fluctuate, Banks Face Mismatches Between Assets and Liabilities, Leading to Financial Exposure. Vector's Analytics Provide Insights Into the Impacts of These Changes, Enabling Effective Risk Management Strategies. By Assessing Earnings Sensitivity and the Economic Value of Equity (EVE), Vector Helps Institutions Make Informed Decisions About Their Asset and Liability Structures, Minimizing Mismatches and Ensuring a More Resilient Balance Sheet.

Net Interest Income (NII)

Delta NII represents the difference between the interest earned on assets and the interest paid on liabilities, making it a crucial measure of a bank's profitability and financial health. This metric reflects how effectively a bank can generate income from its assets while managing the costs associated with its liabilities. Earnings at Risk (EaR) quantifies the potential impact of interest rate changes on NII over a specific future period, typically ranging from 12 to 24 months. By understanding EaR, banks can gauge their exposure to fluctuations in interest rates and prepare for potential changes in their net interest income.

Economic Value of Equity (EVE)

Vector Provides Comprehensive EVE Analysis Tools That Measure the Impact of Interest Rate Changes on the Net Present Value of a Bank's Assets and Liabilities. This Analysis Is Crucial for Understanding How Interest Rate Fluctuations Affect Financial Stability and Profitability. By Offering a Long-Term View of Interest Rate Risk, Vector Helps Banks Assess Potential Shifts in the Economic Value of Equity, Enabling More Informed and Strategic Asset-Liability Management (ALM) Decisions.

Duration Gap Analysis

Vector Provides Duration Gap Analysis Tools That Enable Banks to Measure the Sensitivity of Assets and Liabilities to Interest Rate Changes. This Analysis Helps Institutions Understand How Fluctuations in Rates Impact Their Financial Position. By Identifying Duration Mismatches, Vector Optimizes Asset-Liability Management (ALM) Strategies, Minimizing Interest Rate Risk and Enhancing Financial Stability. With Insights Into Duration Gaps, Banks Can Align Their Portfolios to Protect Against Adverse Effects From Interest Rate Changes, Ensuring Resilience in a Dynamic Economic Environment.

Asset Liability Management (ALM) Demo

Vector Delivers Essential Tools for Effective ALM and
Optimized Financial Stability

Publications

Stay Informed With Our Latest
Research and Articles.

Machine Learning Applications in Lending

As of 2020, the financial sector debt reached $66 trillion equal to 25% of the global debt. As the world gears up to fight the pandemic, the need to precisely analyze credit risk and price...

Find more

Automated Machine Learning

AutoML is the automation of ML algorithms and the structured design process of a defined model. It provides predesigned systematically structured data analysis tools that help banks...

Find more

Buy Now Pay Later

Buy Now, Pay Later (BNPL) offers consumers the ability to purchase immediately and pay over time, rapidly evolving from simple 'Pay-in-4' plans to diverse financial models and integrated apps. The sector, primarily funded by merchant fees and occasionally featuring interest or late fees, prioritizes market share over immediate profitability. As it faces stiff competition from both new entrants and traditional financial institutions, BNPL companies must innovate to maintain growth.

Find more

What is Credit Risk and Why is it Important?

The lender offers credit to a debtor, termed a borrower, based on trust in repayment. Credit risk emerges when there's a risk the borrower might not repay, leading to the lender not receiving the principal or interest, thereby incurring significant financial losses. Additionally, substantial costs are often incurred in efforts to recover the loan amount.

Find more

Financial and Regulatory Reporting

Financial regulations, such as Basel and IFRS 9, dictate capital requirements for institutions to ensure economic stability. Government regulators enforce these to prevent crises like the 2008 financial meltdown, which caused major disruptions due to major institutional bankruptcies. Trust in banks, fostered by these regulations, encourages public deposits, crucial for economic functionality.

Find more

Scorecard - Credit Engine

Credit risk scorecards provide quantitative estimates of the likelihood of customer delinquencies, such as bankruptcy or loan default, in relation to their credit status. We've developed a fast, automated credit risk engine to enhance decision-making efficiency. Upcoming posts will explore common ML models used in the consumer finance credit risk sector.

Find more

Prepayment Analytics

The Loan Portfolio Cash Flow Forecast & Analytics offers in-depth cash flow projections accounting for defaults and prepayments, essential for financial planning and interest risk management. It also supports Investor & Warehouse Securitization Reporting with comprehensive pool analysis and aids in Loan Pricing & Scenario Optimization to maintain a balance between profitability and risk.

Find more