Alliance Bank Elevates Asset and Liability Management Capabilities Through SAS Asset Liability Management

The Malaysian financial services group taps the integrated ALM solution to manage interest rate and liquidity risks.

SAS, the global AI and analytics leader, today announced that Alliance Bank Malaysia Berhad (“Alliance Bank”) has implemented the SAS Asset Liability Management (ALM) to bolster its risk monitoring and oversight for its interest rate risk and liquidity risk management. By enabling advanced stress testing, scenario analysis, and predictive analytics capabilities, the bank is able to make faster and more accurate business decisions in response to a changing interest rate environment and gain competitiveness. 

The system’s robust daily reporting capabilities, coupled with advanced tracking of depositor concentrations and liquidity analytics have improved simulations and analyses. This allowed Alliance Bank to manage liquidity based on immediate funding needs and fully automate 90% of processes to improve productivity and accuracy. The bank’s proactive stance in adopting an ALM solution aligns with its commitment to comply with Bank Negara Malaysia's (BNM) Interest Rate Risk on Banking Book (IRRBB) and liquidity guidelines.

"From a cost-efficiency standpoint, this streamlined data sharing, reduced manual interventions, and heightened operational efficiency is forecast to help us realise an annual savings" said Jacob Abraham, Group Chief Risk Officer of Alliance Bank.

By streamlining operations and enhancing the precision of business analytics, SAS ALM ensured that resources were deployed to minimize time-consuming, error-prone tasks and allow staff to focus on more strategic and value-added activities. 

As a result of implementing SAS ALM, Alliance Bank unlocked the following benefits and efficiencies:

• Tenfold improvement in system scalability, transaction per second, and 24/7 system availability and uptime.
• Obtain more than 10% in savings on operational costs, manpower costs, and time spent on production processes.
• Reduce the average time needed for risk assessment and compliance to less than one day.

"Despite compliance being the primary driver for this transition, this transformative leap in ALM management has armed us with superior visibility into interest rates and liquidity. The project further contributed towards our company's Acceler8 strategy to drive efficiencies, growth, and stakeholder value as we focus on providing fast, convenient, and personalized solutions to our customers," said Pecheadavar.

"Due to complex challenges in the industry, ALM processes must come with a high degree of granularity and transparency. The SAS approach provides a comprehensive package of analytical, computational, and governance capabilities, delivering a broader balance sheet management process that integrates the whole spectrum of risk dimensions. SAS' expertise in the area of integrated risk solutions is demonstrated in how we are able to support banks to achieve business efficiencies, streamline operations as well as to better comply with local regulations," said Wilson Yap, Director & Head of Risk Banking Solutions, SAS Institute.

In recognition of the project’s achievements, Alliance Bank was awarded the best analytics initiative in the recent 2024 WatersTechnology Asia Awards.