NetSol offers risk management solutions for the financial services industry. Through our team of local and international risk management experts, NetSol offers a comprehensive consulting and system integration capability to risk managers of banks.Challenges for risk managers in the financial industry are more complex and diverse than ever. Faced with growing demand for consumer, small and medium enterprise (SME) credit on the one hand and meeting the regulatory requirements of the new Basel II capital accord that includes minimizing the risk of operational losses on the other, risk managers are expected to have a near real-time picture of their organization-wide risk.

Several of our solutions help meet these challenges:

Risk Data Management
Risk data issues have surfaced as the single biggest challenge as banks prepare to meet the prerequisites of sophisticated risk analytic systems that are needed in the rapidly transforming banking landscape of Pakistan along with the supervisory review pillar requirements of the new Basel II accord.

As part of our wider financial industry offering we provide:
•  Data Gap Study to allow banks understand things like what data is missing, the quality of available data and what should be their strategy to overcome these gaps - such a study is highly relevant for a pre-Basel II implementation as most banks struggle to understand what their priorities should be for addressing data gaps
•  An ETL (extract transform load) tool and it's implementation expertise in risk management specific environment - as opposed to a generic tool we offer banking specific pre-built financial transformations
•  International "data model" based on multiple implementations across the globe to facilitate a long-term and robust risk solution implementation - the model allows for huge savings in time and money in re-work as the banks increase in complexity of their credit instruments
•  Consulting to help banks identify which Basel II approach is most suited for a given portfolio based on their readiness level from a systems stand-point

Retail Credit Scoring
Whether banks are launching into the lucrative credit card market or shifting into high gear for increasing acceptance rate of credit applicants without compromising the risk they take, we provide just the capability and technology that suits their specific business requirements:
•  Identify homogenous borrower segments
•  Develop segment specific scorecards
•  Develop sound scorecards for the scorecards with help of our consulting and technology tools
•  Use historical data and calculate probability of default (PD) and loss given default (LGD) - meeting the IRB requirements of the new Basel II accord

Corporate Ratings
Statistical techniques for calculating the risk associated with borrowers works well when the financial institution has abundant historical data and default cases. But the scenario is completely different when banks try to estimate the credit worthiness of large corporate customers mainly because:
•  Corporate customers are fewer
•  The definition of a "default event" is vague
•  Qualitative data, which is highly subjective, plays an important role in determining the credit quality of a borrower
•  Most credit assessment data is available in the personal folders of credit officers in multiple free-form documents

The need for a "credible" rating system is further magnified when Basel II IRB requirements are taken into account. In order for banks to reduce capital adequacy, their borrowers must be either externally rated or the internal rating system must comply with the BIS guidelines. Our offering in this space is a combination of local and international consulting expertise combined with domain expertise built into our template-based rating development tools.