Risk Adjusted Performance

Optimising risk and returns

The use of Risk-Adjusted Return on Capital (RAROC) is expanding beyond being merely a performance indicator, to becoming a key driver in pricing and evaluation of transactions.
However, at many financial institutions, risk information remains disconnected from financial close and reporting processes, creating validation challenges.

There is a need for improvement in measuring and meeting risk-adjusted performance objectives, pricing products to reflect their true risk, and understanding how financial institutions are impacted by threats to liquidity and capital adequacy.

Solutions from StraitsBridge

Performance ManagementWe bring extensive experience in risk-adjusted performance measurement and management in financial services. We help clients develop appropriate methodologies that provide a balanced approach to measuring risk and return.

Our risk-adjusted performance measurement solutions support the executive management to:
Determine where incremental investment should occur
Understand true drivers of returns within a business, product, or customer segment
Establish capability to develop bottom-up models that aid in achieving return targets

We ensure that the underlying approaches are transparent and understood by key stakeholders within the organization, thus delivering effective risk-adjusted methodologies that are capable of influencing behavior

These solutions encompass capabilities that are vital to understanding and establishing a robust performance management framework and include:

Funds transfer pricing

Risk computation
Revenue measurement, allocation

Cost allocation

Determination and allocation of economic capital

Contact us for more information
Email us: info@straitsbridge.com
Call us on: +65 6408 0501

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Lessons from the global financial crisis

The continual fallout of the global crisis has demonstrated the challenges faced by financial institutions when dealing with issues in data complexity, disconnected processes, a lack of transparency and disjointed decision making.

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