Risk Integrated has developed the industry's most advanced approaches for managing the risk of specialized finance. Our aim is to provide financial institutions with sound methodology available in usable, industrial-strength, technology platforms that integrate easily with an institution’s current business processes and technology.

Risk Integrated uses the industry's most advanced analytics, developed specifically for each asset class. We tailored our system to the highly complex deal structures found in commercial real estate, project finance, and other specialized lending. Our methodologies are designed to comply with Advanced Basel II standards, and include Basel and economic capital reporting.

Our methodologies are delivered through software systems built with state-of-the-art technology, fully compatible with an organization's IT infrastructure. The systems are easily customized, significantly shortening the implementation time. Our industrial-strength computational risk engines are designed to integrate seamlessly with your IT infrastructure via secure XML web services and industry-standard database technologies (IBM DB2, Oracle, Microsoft SQL Server, etc). Risk Integrated’s SFS can also be accessed via the web or, in extreme cases, by cellphone.

Please consult our press page for further information about our approach to risk managing credit assets

Risk Integrated provides the only complete Basel II compliant, integrated solution for specialized finance.

The Basel Committee on Banking Supervision is the body of top banking supervisors for Europe, North America, and Japan with 120 member countries. They issued capital adequacy regulations based on leverage ratios for their members in 1988. The Basel Capital Accords of 1988 (Basel I) required banks to hold capital against all customer loans equal to 8% of the balance.

In 1999 the Basel Committee began a major overhaul to the rules, and proposed introducing a new capital adequacy framework to replace the 1988 Accord. This has become known as Basel II. Banks perceived they could increase their competitiveness if the regulators allowed them to divide their outstanding loans into baskets or “asset buckets”, and then apply a capital allocation suitable to the risk in each bucket. The result would be that significantly less capital would be tied up. Thus began the rewriting of the regulations.

The New Capital Accords (Basel II), which came into effect in 2007, differentiates the amount of capital according to the risk of individual assets. More capital is required for assets that are riskier or whose risk is not soundly measurable. According to the regulations, the capital held against an asset may be calculated using one of three approaches:

The SFS has been reviewed by regulators in the U.S. and Europe for Advanced Basel II compliance. It has also been successfully back-tested against historical default data.

For a further discussion please read our presentation on Basel II.

The Specialized Finance System (SFS) is a complete, fully developed enterprise-level IT solution, not just a spreadsheet or a prototype lost somewhere in the bank. It can be used to run Risk Integrated’s cashflow models or to import the institution’s existing prototype models into a robust, fully auditable, risk engine available from any workstation in the bank or across the internet.

The New Basel Accord requires a rating process across all asset classes. The unique nature of specialized finance, including project finance and commercial real estate, makes it the trickiest set of credits for risk measurement. The complexity of specialized finance creates a relatively inefficient market, with the potential for significant losses at banks less able to manage their risk and opportunities for large arbitrage profits for those who can. The Risk Integrated Specialized Finance System (SFS) provides full Basel II compliance at the advanced level, giving a clear competitive advantage in today’s market.