Misys FusionRisk

“Misys FusionRisk provides responsive risk dashboards to ensure risk transparency at any level of Axis Bank.”Pravat DashHead of Market Risk Management Axis Bank

Case study

Axis Bank uses risk intelligence to create opportunity for growth

About Axis BankAxis Bank is one of India’s top three private banks, created in 1994 as part of the liberalisation of a banking sector that had for decades been dominated by government banks. It has grown rapidly, and currently has over 1,400 branches (including seven overseas offices) serving retail and corporate customers. It offers a wide range of services and products, including core banking products, treasury products, fixed income products and derivatives.

The challengeAs an innovative, new-generation bank in India, Axis Bank is growing at around 30-35% per annum – a consistently higher rate than the industry average. With a state-of-the-art risk monitoring function, manages understood that the business could push itself to even higher growth rates.

The solutionAxis Bank selected Misys FusionRisk across its trading operations. The system allows Axis to make proactive business decisions based on genuine risk intelligence, meet regulatory demands and support new growth opportunities.

The resultThe solution helps to sustain Axis Bank’s high growth momentum through more effective market risk measurement, monitoring and control. It reduces the manual effort involved in analytics and makes the risk management process more accurate and timely.

www.axisbank.com

“We were looking for an enterprise-wide market risk system capable of integrating with multiple trading systems and consolidating all economic position information in a single place.”

Pravat DashHead of Market Risk Management Axis Bank

At a glance

Products • Misys FusionRisk Advanced Measures • Misys FusionRisk Credit

2 Misys FusionRisk | Axis Bank

“Misys FusionRisk provides responsive risk dashboards to ensure risk transparency at any level of the organisation.”

Pravat DashHead of Market Risk Management Axis Bank

The challengeAxis Bank is one of India’s most forward-looking banks in terms of transitioning to an advanced risk management system.

The move has been driven as much by the bank’s strong risk management culture as by the Indian banking regulator and Basel II internal model requirements: Axis Bank sees raising its risk management capabilities as a way to accelerate growth.

Risk systems technology in most Indian banks has not kept pace with business growth. Banking software in this market has traditionally been accounting-oriented, designed to provide financial controls rather than address risk management needs. As a result, Indian banks’ flagship systems often lack comprehensive and dynamic market risk functionality.

Axis Bank addressed this by building internal market risk functionality as an add-on to its trading systems, which typically meant calculating risk numbers manually. This approach did not allow for dynamic stress-testing, management information, flexible limits definitions or back-testing – all parts of the risk arsenal that today’s risk analysts need.

Pravat Dash, Head of Market Risk Management at Axis Bank, explains: “We were looking for an enterprise-wide market risk system capable of integrating with multiple trading systems and consolidating all economic position information in a single place. We wanted the capability to drive dynamic risk engines, define limits and support drill-down.”

The solutionAfter looking at a number of vendors and shortlisting four, Axis Bank selected Misys FusionRisk, an enterprise risk system that can exist independently of any trading system.

Pravat Dash says: “Misys FusionRisk provides a good platform for Axis’ needs, such as VaR, limits, and compliance with our internal model requirements. Misys FusionRisk provides responsive risk dashboards to ensure risk transparency at any level of Axis Bank.”

Another important element in the decision was the comprehensive Misys delivery and support organisation: in particular, the fact that the local support team in India had already implemented Misys FusionRisk solutions at six other Indian banks.

This was important to Axis Bank because the Indian market has a number of peculiarities (for example, corporate bonds in India require special treatment). The project also required the integration of numerous front office systems. The local Misys team had the skills to ensure that project risk would be kept to a minimum.

Misys FusionRisk is helping Axis Bank keep ahead of the competition with advanced risk management capabilities that not only meet regulatory requirements, but also fuel business growth.

Key benefitsThe new system is expected to have a significant impact in a number of areas:

• Support for growth: sustain Axis Bank’s high growth momentum and target a stable growth rate through more effective market risk measurement, monitoring and control related to treasury products. • Regulatory readiness: prepare Axis Bank to comply with Basel II internal model requirements. • More automation: reduce the manual effort involved in analytics and management information, and make the risk management process more accurate and timely. • Greater insight: use dashboards to increase visibility of the risk dynamics faced by Axis Bank across 15 banking products and across an array of derivative products.

Looking to the futureThe next natural milestone will be to tune the solution for Basel II internal model requirements. Axis Bank would like to remain ahead of the other major banks in the market and finish the project ahead of schedule.

Credit risk is the next area where Axis Bank might upgrade its risk management practices, especially in terms of convergence between market and credit risk. Today credit risk is managed in the core banking systems, so trading credit risk is excluded. In the future, Axis Bank may extend the platform to support new credit regulations, which could easily be achieved with Misys FusionRisk.

3Misys FusionRisk | Axis Bank

About Misys Misys is at the forefront of the fi nancial software industry, providing the broadest portfolio of banking, capital markets, investment management and risk solutions available on the market. With more than 2,000 customers in 130 countries our team of domain experts, combined with our partner eco-system,

systems, collect data and create intelligent information to drive smarter business decisions. To learn more about how our Fusion software portfolio can deliver a holistic view of your operations, and help you to solve your most complex challenges, please visit misys.com and follow us @MisysFS on Twitter.

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