Increased Return on VaR
Risk can change quickly when there are hundreds of transactions every day. The multiple dimensions of risk (portfolio, term, product, geography, counter party, liquidity, volatility) add complexity. Visible interactive risk reports show VaR components, how VaR relates to P+L and limits, how VaR is distributed and lead to a more efficient allocation of VaR. 10% better return on $1M of VaR is significant.

Data Cleansing Reduces Capital Requirements With visualization, suspect market data and missing data jump right out. Suspect data can be highlighted in the market context, together with rule-based alerts, so analysts can decide how best to fix the suspect data. An efficient cleansing process means fewer analysts are required, but the real benefit is reducing the tails of the frequency distributions, causing smaller VaR numbers, and therefore reduced capital adequacy requirements. Banks have an 8% capital ratio. Being able to reduce VaR from $50 M to 49 M VaR, on $10 B of assets, is $16 M.