Quantitative Risk Management

Regulatory requirements demand having a solid grasp of risks as well as calculations of the potential capital charges resulting from those risks. Business planning requires knowledge of the uncertainties in cashflows and evaluation of potential threats. Project approval and management need good assessments of cost and schedule risk. The more detailed and reliable the analysis, the better the decisions that will be made to manage your business. The BWise solution for Quantitative Risk Modeling (QRM) provides the necessary insights.

Quantitative Risk Modeling with BWise® Risk Management

BWise offers a complete range of risk modeling capabilities which are an integrated part of the BWise® Risk Management software solution. Users can build quantitative risk models of any size and sophistication and incorporate information from the BWise databases. BWise QRM offers an unparalleled range of probability distributions, correlation structures, and time series models that can all be fit to data. Visual interfaces in the model building environment make it easy to understand and explain each calculation. A wide range of specialized tools for modeling things like extreme events and aggregate distributions greatly simplify model building. Using advanced Monte Carlo techniques, BWise QRM also provides a comprehensive customizable risk analysis reporting tool, including:

  • Histograms, ascending and descending cumulative plots, box and Pareto plots
  • Plots can be interrogated and edited directly within the BWise environment
  • Tornado, scatter and spider plots for sensitivity analysis
  • Trend plots to review variables like cashflow over time
  • Results filtering, statistical summaries, reviewing data from each simulated sample

Keeping track of the entire risk model

One of the most challenging components of risk modeling is keeping track of multiple versions of a risk model, different scenarios and all their simulation runs. BWise QRM is an integrated part of the BWise Risk Management software solution where simulation results can be recalled or precisely reproduced. Managers can run and store analyses of different scenarios directly in the BWise environment without accessing the model. This enables the organization to keep the essential full and reliable audit trail including the relevant data variables.

Example Applications

Project Risk Management

Too often, major projects fail to meet their budget and deadline because of insufficient assessment of risk and uncertainty during planning. With BWise QRM, project cost and schedule models can be built quickly from templates. Correlation between task durations and risk events are easily incorporated to provide realistic estimates of cost and duration.
For more information about Quantitative Project Risk Management download the use case.

Cash Flow at Risk

Cash flow is one of the most if not “the” most important business driver in any business. Management needs solid cash flow prognoses to drive business decisions like making or delaying investments, or the necessity to cut costs. Many highly uncertain factors such as sales volumes, currency fluctuations, cost components and product and service pricing play a significant role. BWise QRM makes it possible to create sophisticated cash flow risk models which provide invaluable information to manage the organization.

Value at risk

Financial institutes like banks and insurance companies must evaluate their risk exposure to determine the capital needed to cover their risk. BWise QRM has all the tools needed to perform these sophisticated analyses, including a wide range of correlation tools (copulas), univariate and multivariate financial time series like ARCH and GARCH, calculations of VaR and CVaR, aggregate modeling tools like fast Fourier transform, de Pril and Panjer, and many other finance-related capabilities. 

BWise for Risk Management

BWise Risk Management

Download the brochure about the BWise Risk Management Solution: " A Day in the Life of Gerard Parker, Chief Risk Officer".

GRC Journey Web TV

Watch the video: Understanding your Company's Risk Profile.

Incorporate Risk Management into your Organization

Read the whitepaper from one of our GRC experts about the Four Steps to Incorporate Risk Management into your Organization.

Quantitative Project Risk Management

Download the use case about Quantitative Project Risk Management.

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