Paris-based performance management software vendor Almonde is embedding data mining technology from Knowledge eXtraction ENgines (KXEN) in its credit risk management platform, Almonde Credit, to help firms comply with Basel II regulations.
Almode says financial firms typically lack the product modelling and analytics necessary for an internal ratings based (IRB) approach for Basel II. By embedding KXEN within the internal ratings module of Almonde Credit, clients can move towards an IRB approach and reduce capital requirements for credit risk.
By incorporating regression analysis which develops predictive models for credit analysis, KXEN delivers a behavioural score model. This is used to evaluate the probability of customer default, perform back testing of credit ratings and assess the quality of portfolios by comparing the quality of business between different areas and industry sectors.
Ben Salama, CEO, Almonde, says: "We now provide a credit risk management solution that builds scoring models for enhanced data analysis, achieving a more accurate and manageable credit process."