- Industry reports timely transfer of Cash ISAs for first nine months of 2018
- RBS co-develops new government-backed guidelines to boost engagement between Fintech and banks
- NatWest launches digital proposition for SMEs
- HSBC data breach serves a stark warning for customers to do all they can to protect their data
- Bank of England coordinates cyber resilience exercise
- Lloyds partners Thought Machine to accelerate digital transformation
- UK's Prime Minister creates new business advisory councils expired
- One in five Brits would never inform a partner of their debt situation, finds Equifax expired
- Coupa unveils vision to transform fragmented B2B payments process expired
- UK Finance data shows mortgage arrears remain at an historic low expired
- Barclays appoints new Head of UK Corporate Banking expired
- Court of Appeals judgement on ATM business rates a relief to high streets, says Auriga expired
6th November 2018
Banks should use AI to prepare against Brexit shock, says SAS
Following the news that the majority of banks have shown themselves to be well prepared for economic shock in the European Banking Authority’s 2018 stress test, Lee Thorpe, head of risk business solutions at analytics leader SAS, considers the need to continue to bolster planning efforts using advanced AI in the run-up to Brexit.
He says: “With Brexit just around the corner, it’s good to see that the banking sector has proved itself well capitalised for a severe but plausible stress scenario. Given the levels of uncertainty currently at play, forewarned is forearmed. But that’s just the problem – with the details of any potential deal (or no-deal) still unclear, how forewarned can banks actually be without testing hundreds of possible permutations?
“Following on from the test, financial institutions must continue to ensure that they map out as wide a range of scenarios as possible, to mitigate the potential consequences of Brexit. They need to constantly update crisis responses using analytically-crafted scenarios so they can react to any market restrictions that result in an economic downturn as quickly as customers and the nation reacts.
“Having to organise and invest for regulatory measures may not be a preferred business priority for financial institutions, but there is a significant upside to getting a better understanding of the market influence on capital especially during a crisis. The automation of processes to execute the analytical models means that many different scenarios can be put to the test to help support strategic decisions or ensure preventive measures against losses are implemented rapidly.
“We’ve come a long way since the 2008 crash. Artificial intelligence (AI) is now starting to be utilised in the banking world. With advanced analytics at its core, AI can now help risk teams map highly complex situations and approximate potential outcomes before humans make a final decision. Banks need to collaborate with AI to build the strongest possible understanding, informed by deep analytical insight.
“The biggest test is still to come in March – banks must go beyond the regulatory requirements and ensure they have the foresight to prepare for multiple worst case outcomes, even while hoping for the best.”