SOURCE: Primatics Financial

Primatics Financial

June 18, 2013 08:00 ET

Study Finds Stress Testing to Be a Top Priority for Banks

Primatics Financial Industry Survey Indicates That a Growing Number of Banks See Stress Testing as an Important Business Process to Manage Risk

MCLEAN, VA--(Marketwired - Jun 18, 2013) - Primatics Financial, the leader in integrated loan portfolio management, announced today the results of its industry study around loan management and stress testing oversight preparedness. After polling executives from banks of all sizes at its annual EvolvLIVE conference, the Primatics study found that 50% of large banks and 23% of smaller banks indicated that stress testing was their finance department's top priority. The study also confirmed that a majority of banks are seeking ways to improve their modeling capabilities to provide a more robust and forward-looking view as demanded by the CCAR stress testing framework. Primatics is finding that banks have become more proactive in their approach to improving the stress testing process, and many banks are even opting to conduct a mid-year trial run in advance of the required year-end stress test.

Additional survey data polled during a Primatics sponsored stress testing webinars, found:

  • 60% of banks see improving their technical solutions as the biggest need to increasing the capabilities of their stress testing activities.
  • 45% of banks created a group (either separate or cross-functional) to address stress testing needs.

Now that stress testing also affects banks with $10 billion and above in assets, bank executives should use this required annual exercise as an opportunity to gain unprecedented visibility and understanding into their loan portfolios. Given the acknowledgement of challenges with technology and data, Primatics is observing that banks are seeking continual improvement for solutions that can automate the stress testing process in a controlled environment. As regulators continue to view stress testing as a reasonable and practical exercise that banks of all sizes should integrate into their risk-management and financial forecasting activities, banks are keen to develop technical solutions to help them execute the stress testing process effectively and efficiently on a continual basis, even with limited capital and resources.

"Banks are now realizing that the new stress testing regulations require more than just compliance -- they require continual improvement in the bank's ability to predict loan performance during a stressed economic scenario, which will, of course, require strong and forward-looking modeling capabilities," said Jeff Sant, Executive Vice President and Co-Founder of Primatics Financial. "To achieve this, banks will need technologies and processes in place that allow seamless interaction between risk and finance teams. This seamless interaction will provide banks with the ability to more quickly synthesize forecasting scenario results, better understand portfolio exposures and support capital plan development, ultimately turning compliance concerns into a strategic business advantage."

Primatics CEO Kevin Hesselbirg continued, "Just as regulators are seeking continual improvement, we are committed to continual product improvement and R&D expenditures designed to meet and exceed market needs. We have been following on-going market requirements for years, and we are pleased that more and more financial institutions are validating our vision for software and analytical solutions by selecting our Evolv suite to enable, not only compliance, but also value-added business review of their loan portfolios. Now we see continued pressure to have a more forward-looking view of their loan portfolio, and as a result, we are further investing into more sophisticated modeling and accounting forecasting capabilities to allow our clients to be more effective and cost-efficient. This creates more time for our clients to execute deeper analytical reviews, resulting in more critical and strategic decision making designed to improve their overall portfolio performance. "

About Primatics Financial
Primatics is the leading provider of financial services solutions that enable financial institutions to better process, model and analyze loan portfolios, comply with accounting and regulatory requirements and grow their businesses. Through its enterprise-grade Evolv Suite and proven business analysis services driven by strong domain expertise, Primatics delivers timely, scalable, automated and controlled results in today's changing market and regulatory environment. Primatics is headquartered in McLean, Virginia, USA. For more information visit: www.primaticsfinancial.com

Evolv Stress Testing Solution
The Evolv Stress Testing solution, built on its award winning Evolv platform, was unveiled at Primatics' 2013 EvolvLIVE conference in Washington, DC. The module is designed to provide banks with the innovative technologies needed to operate more strategically and efficiently amidst a dynamic and ever-changing regulatory landscape. More information on how you can leverage Primatics' integrated software solution in support of stress testing can be found by visiting the Evolv Stress Testing solution page.