Affinity Risk Model (ARM) – Enrich Financial Risk Assessment
Globally Financial institutions are at the cusp of a major digital disruption. They are also one of the progressive verticals, which has adopted best of breed digital technologies, that run the organizational engines. But every vertical has unique pain areas, and for financial institutions managing and understanding financial risk is a perennial challenge, as the landscape keeps evolving and gets complicated by the day. One thing common amongst banks and financial institutions of any size, nature and complexity is their aversion towards financial risk. In addition to this, we can also affirm that all of them have a greater yearning towards putting better measures to determine such financial risks.
Hence the need for a digital risk assessment model becomes all the more compelling. It gives banks and financial institution the technology leverage to not only assessing risk but also to seamlessly run the risk assessment task, in a crisis situation. For instance a pandemic like COVID-19.
Decoding Risk-The ARM Way
Given this backdrop, the banks and financial institutions are gearing up to the new normal and reinventing themselves. Digital technologies will play an all-pervasive role, in fact with the lockdowns and social distancing norms, which is more likely to continue for a longer period, the traditional business models banks have right now is at the threshold of a major transformation.
Right from onboarding a new customer, to credit due-diligence to lending to risk management – a whole lot of functions will go completely digital.
Here is where Nihilent’s Affinity Risk Model (ARM) comes into play. The Model takes into ambit a 360-degree view of customers and the interlinked risk. This model will enhance and enrich the risk assessment capability that the bank or a financial institution currently has and can provide greater insights about financial behaviour by leveraging Data Science and AI / ML.
The advent of Data Science and AI /ML gives us the power to decode financial risk in more ways than one. This is an evolving area, that will only firm up in the post-COVID -19 phase and the fullest potential will be realized. We believe that the Chief Risk Officers of financial institutions will look at more innovative ways at maximising risk assessment and mitigating it using digital technologies as we go forward.