Asset and Liability Management, Fund Transfer Pricing, and Liquidity Management
SINGAPORE — Hong Leong Finance Ltd has implemented an integrated risk management solution from Kamakura Co for its balance sheet management, funds transfer pricing, and liquidity management processes. The Singapore-listed finance company (SG:S41), part of the Hong Leong Group, made its decision after doing a comprehensive upgrade exercise involving its risk management processes.
“Hong Leong Finance was clear in its risk vision, and wanted to incorporate an integrated framework for balance sheet management, funds transfer pricing and liquidity management initiatives,” said Dr. Clement Ooi, Kamakura’s EVP and Managing Director of Asia-Pacific Operations.
“They wanted to load the data once, and reconcile the data once. Kamakura Corporation’s solution fit the bill perfectly, providing the company with an accurate assessment of transaction cashflows that can then be used for gap, duration, and mismatch management, as well providing a crystal-clear understanding of the margins associated with transactions.
“The company now has an integrated, holistic computation engine — the platform upon which it will build its integrated risk framework. The company will be one of the first to generate both historical and forward-looking views of its balance sheet and gain a transaction-level understanding of profit margins. This system will give it a good appreciation of customer behaviour, products, business units, and organisational profit and value dynamics.”
“Companies are no longer looking for fragmented solutions for risk and compliance, but seeking to adopt a holistic, robust framework that allows for a one-time loading of data for repeated use in the various aspects of risk and compliance,” said Mr Ang Tang Chor, President of Hong Leong Finance. “We aim to enhance our overall risk management monitoring framework, turning risk insight into a strategic business driver to attract and retain customers, develop new sources of revenue, and proactively meet risk and regulatory requirements.”
Through its financial services arm Hong Leong Finance, Hong Leong Group has expanded its line of products and services over the years to cater to the financial needs of both individuals and the business community. In operation since 1961, Hong Leong Finance is Singapore’s largest finance company, with a network of 28 branches island-wide. Its extensive suite of financial products and services includes deposit and savings accounts, corporate and consumer loans, government assistance programmes for small and midsize enterprises (SMEs), and corporate finance and advisory services.
To stay ahead of the game in the growing SME market, Hong Leong Finance launched its Business Current Account service in 2007, becoming the only finance company in Singapore to offer checking account services to corporate customers. It is a pioneer in the Local Enterprise Finance Scheme administered by the government enterprise development agency Spring Singapore.
Hong Leong Finance has twice won the “Friends of Enterprise” award by Singapore’s Spirit of Enterprise organization. It also received the Singapore Finance Company of the Year Award for three consecutive years starting in 2011, and the ASEAN Finance Company Award from 2014 to 2016.
Kamakura Corporation has a full suite of risk management and regulatory compliance solutions — including IAS39/IFRS9, Basel II/III, Market Risk, Credit Risk, ALM, FTP, Liquidity Risk, Capital Management and Planning, Credit Estimation, Margin Management, and Financial Accounting — all offered through one integrated, holistic computation engine.
Martin Zorn, President and COO of Kamakura, said, “The successful implementation of the balance sheet management, funds transfer pricing, and liquidity management project in Hong Leong Finance Singapore is a clear indicator that organisations are seeking to deploy solutions that have minimal IT overhead, use an architecture that is open and organisation-agnostic, and most importantly, use the same set of results to stress test all possible scenarios and outcomes.”
To see risk commentary by Kamakura on a daily basis, please follow Kamakura CEO Dr Donald van Deventer (www.twitter.com/dvandeventer), Kamakura President Martin Zorn (www.twitter.com/riskmgrhi), Kamakura Principal Risk Officer Suresh Sankaran (www.twitter.com/sureshkamakura); and Kamakura’s official twitter account (www.twitter.com/KamakuraCo).