|Patent issued for loan stress-testing technology|
WebEquity Solutions received a patent from the U.S. Patent and Trademark Office covering the company's loan stress testing process, which is a functionality of the WebEquity Risk Dashboard software product.
The patent covers the unique process the company developed for stress testing individual loans or loans across an entire portfolio and the ability to automatically reassign a risk rating to each credit based upon the results of the stress test.
"Today's commercial lending environment is increasingly competitive, yet requires that financial institutions demonstrate they are proactively managing the risk of the loan portfolio," says Doug McGregor, CEO of WebEquity Solutions. "The most successful institutions will be those that invest in industry leading technology such as the Risk Dashboard which will help them operate more efficiently, make better credit decisions, and gain early visibility to the potential impact certain scenarios may have on borrowers' ability to pay. Our patented stress testing capabilities deliver on these critical needs."
The WebEquity Risk Dashboard enables financial institutions the following credit risk management capabilities:
Consolidated view of loan portfolio-provides a highly visual representation of all of the business loan information that an institution has on its books, such as total loan volumes broken down by interest rates, risk ratings, and credit actions.
Risk concentrations assessment-enables institutions to obtain an accurate measurement of their loan concentrations by loan type, risk rating, and by branch location.
Sensitivity analysis-allows lenders to determine a borrower's debt service margin and project what factors could impact a borrower's ability to repay a loan, such as changes in income, expenses, and interest rates.
Pre-and post-approval stress testing-gives institutions the full picture of how individual loans and/or portfolio segments could be affected by unexpected changes in risk variables and market conditions by stressing factors, such as liquidity, equity to asset ratio, repayment capacity, vacancy rates, rent revenues, crop sales, government payments, and more.
[This article was posted on December 12, 2012, on the website of ABA Banking Journal, www.ababj.com.]
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