Credit Risk under the Microscope - Irish Software Company Sets New Standard for Credit Risk Management by Lenders
Credit Expo Ltd, headquartered at NovaUCD, has today announced the launch of its ground-breaking ECM Analytics software system to measure and analyse credit risk in lending institutions.
Credit Expo’s ECM Analytics (Empirical Credit Risk Management), a patented software system, measures and analyses credit risk on a continuous basis and promises to become the new standard for credit risk management in financial institutions.
For individual lenders the ECM Analytics product provides transparency of their own risk experience in terms of loan types, maturities, loan approvers and loan referral sources. It empowers the lender, either to avoid the risk entirely or, if acceptable, to mitigate that risk and to price it appropriately.
ECM Analytics is the combined result of doctoral studies by company founder, Patrick Shallow, at UCD’s Michael Smurfit Graduate Business School and a series of pilot installations in Irish financial institutions.
ECM Analytics is a web-enabled software suite which directly analyses the credit risk experience of the individual lender. It calculates the lender’s loss forecast and its provision requirement, drilling down to the individual loans where, based on the lender’s own experience, it measures the risk premiums for different loan types and different loan maturities,thus eliminating any credit exposure surprises later on.
According to Patrick Shallow, founder, Credit Expo, “What is radically different about ECM Analytics is that it rejects the traditional and almost universal static spreadsheet risk model used by most lenders to estimate loss forecasts and provisions and which is, arguably, responsible for misinforming historic lending policies and pricing.” He added, “ECM Analytics takes a positive, liberal view of the International Financial Reporting Standards (IFRS), to assist lenders to measure risk before it becomes irretrievable, including calculating risk in the up-to-date accounts.”
Patrick Shallow, founder, Credit Expo
Working in close association with the progressive Credit Union Development Association (CUDA), the Credit Union version of the product has been developed over the last two years and following successful piloting and validation, ECM Analytics is now being rolled out to the Irish Credit Union movement.
Along with the roll-out of the product into the Irish market, Credit Expo has recently engaged with foreign–based bank software providers for international distribution of ECM Analytics.
Patrick Shallow, founder of Credit Expo, is a former senior banker with extensive experience of corporate and retail banking. He was Managing Director of the Metropolitan Building Society and, previously Deputy Managing Director of Chartered Trust Ireland. In South Africa he worked as economist with Standard Bank of SA, specialising in the analysis of Bank branch performance. He also established the specialist treasury and banking consultancy, Finalysis, which has offices in Dublin and London and which advises companies on all aspects of banking.
ENDS
26 July 2012
For further information contact Micéal Whelan, University College Dublin, Communications Manager (Innovation), e: miceal.whelan@ucd.ie, t: + 353 1 716 3712 or Declan Mooney, Commercial Director, Credit Expo, e: dmooney@creditexpo.ie, t: +353 1 716 3672.
Editors Notes
Credit Expo is a credit risk management consulting and software company founded in 2003 by Patrick Shallow. Credit Expo’s ECM Analytics is an innovative, patented software system for measuring and managing credit risk. ECM Analytics is based on statistical algorithms programmed and patented for loan and loss forecasting and is industry certified.
The scope of the application ranges from tracking well-performing loans to loans with a high risk of default. ECM analyses and tracks credit risk from the portfolio level, through the various loan characteristics, down to account level, to inform loan pricing and collections management.
ECM’s precise measurement of credit risk delivers a critical input, first in the identification of new business quality and, thereafter, for collections and arrears management. www.creditexpo.ie
At NovaUCD, the hub for new ventures and entrepreneurs at University College Dublin, we provide purpose-built, state-of-the-art incubation facilities for knowledge-intensive companies alongside a comprehensive business support programme for our client companies. At NovaUCD we nurture new technology and knowledge-intensive enterprises such as Credit Expo. NovaUCD has been funded through a unique public-private partnership that includes AIB Bank, Arthur Cox, Deloitte, Enterprise Ireland, Ericsson, Goodbody Stockbrokers, UCD and Xilinx. www.ucd.ie/innovation
CUDA (Credit Union Development Association) is a progressive representative & development association that was formed in 2003 by Ireland's most progressive and leading credit unions, in recognition of the real need for progressive credit union leadership and development in an increasingly complex financial environment.
CUDA is the only legally incorporated representative association for credit unions in the Republic of Ireland and its membership has a combined asset base of over €1.5 billion and over 250,000 members. www.cuda.ie
