SAS Solves Top Concerns in Banking Industry; Solutions Help Banks Manage Growth and Mitigate Risk

CARY, N.C., Nov. 5, 2002 -- Large business loan losses have increased, making credit risk the primary concern of the banking industry, financial analysts and the investor community, according to the 2002 Shared National Credit review of syndicated bank loans.

This annual snapshot is issued by the Federal Reserve Board, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency. Through delivering a series of targeted software solutions that address and solve this growing concern, SAS, the leader in business intelligence, has demonstrated its responsiveness to the needs of the financial services industry. Built on more than 25 years of industry experience and SAS' technology expertise, SAS(R) Credit Scoring, a component of SAS(R) Banking Intelligence Solutions, provides the intelligence for banks to improve the accuracy of credit decisions, manage growth and credit exposure leading to increased company profits.

SAS Banking Intelligence Solutions, a series of packaged applications for financial services, includes SAS Credit Scoring, SAS(R) Anti-Money Laundering and SAS(R) Marketing Automation. All of these solutions are delivered on a common, underlying industry data model, which defines business entities and processes for financial services. This foundation ensures that consistent and accurate information is shared across the enterprise, so that key customer-centric business functions are aligned to help banks manage growth and exposure effectively.

"SAS responds successfully to the fluctuating demands and unique business pains of the financial services industry with a powerful, multifaceted analytic and data management platform," said Bob Moran, vice president and managing director for data knowledge and analytics at Aberdeen Group.

Improving the accuracy of credit decisions

From July 2001 to July 2002, the 2002 Shared National Credit study reviewed 9,328 loans and commitments that valued $1.9 trillion. Of those loans, approximately 13 percent were in default or unlikely to be repaid. This marks the highest proportion since 1992, when approximately 15 percent of commitments were listed as being at-risk. Of particular note, commitments characterized as losses, or "write-offs", surged to a record $19.6 billion. As a result, credit costs are skyrocketing at leading financial institutions, and they are reporting a downturn in profits. This situation resulted from excessive risk-exposure due to the lack of alignment between risk management and marketing. Now faced with the mounting issues of poor credit quality and bad loans, banks are creating strategies to align risk management with other critical customer-centric business functions.

Through predictive analysis, SAS Credit Scoring provides banks with a better understanding of the specific risk characteristics that lead to delinquency, default and, ultimately, bad debt. With this knowledge, banks can improve the accuracy of credit decisions on both the lending and servicing side of the business in order to reduce credit loss and increase profits. SAS Credit Scoring delivers comprehensive, in-house capabilities that give lenders control over managing risk while eliminating the need to maintain a cost-prohibitive and inflexible outsourcing strategy. Banks and lending institutions can develop, validate, implement and report on "points-based" credit scorecards faster, cheaper and with more flexibility than credit outsourcing alternatives. Using both application and behavioral customer data, banks can assess credit risk for existing customers and loan applicants. The time saved during the scorecard development, validation and implementation phase allows financial institutions to respond more swiftly to market opportunities and pressing strategic initiatives.

Combating money laundering

SAS' commitment to the financial industry reaches beyond credit scoring. Highlighting the need for enterprisewide risk management, the new anti-money laundering requirements of the USA PATRIOT Act are a paramount concern in the financial services industry. SAS Anti-Money Laundering helps banks detect and report suspicious financial activities more quickly and effectively, thus reducing risk exposure, meeting government regulations, and protecting shareholder and consumer confidence. The solution is built on an industry-specific, integrated and open-ended architecture, and can gather and transform the appropriate enterprisewide data into useable knowledge to identify potential money laundering activity.

Improving and fine-tuning marketing campaigns

Financial institutions are also struggling with the issues of increased competition and customer attrition. Marketing departments in banks, as in any other industry, are being asked to achieve greater results with fewer resources. Savvy marketers understand that their customers are their most valuable assets. Using SAS Marketing Automation, which delivers powerful analytics with industry-leading campaign management technology, banks can understand their customers better and communicate with them more effectively through targeted campaigns.

With more than 25 years of experience in financial services, SAS works closely with top financial institutions to provide timely solutions that address critical business needs. In the banking industry alone, SAS works with 1,100 banks worldwide, including 97 percent of Fortune Global 500 banks. SAS customers include AXA Financial, Barclays Bank, Dreyfus, Hang Seng Bank, ING Bank, and U.S. Bancorp.

"SAS continues to demonstrate its market expertise in the financial services industry by addressing specific business pains, including credit risk, regulatory compliance and customer relationship management, through targeted solutions and supporting the concept of an aligned business process," said Mark Moorman, vice president of the financial services practice at SAS. "By delivering our solutions on an industry intelligence model, the common, extensible framework includes industry best practices and analytical intelligence. This platform allows greater flexibility in responding quickly to industry trends and changing business needs throughout the organization while managing risk and ensuring maximum return on both existing IT and capital investments."

About SAS

SAS is the market leader in providing a new generation of business intelligence software and services that create true enterprise intelligence. SAS solutions are used at more than 39,000 sites - including 98 of the top 100 businesses on the Fortune 500 - to develop more profitable relationships with customers and suppliers; to enable better, more accurate and informed decisions; and to drive organizations forward. SAS is the only vendor that completely integrates leading data warehousing, analytics and traditional BI applications to create intelligence from massive amounts of data. For more than 25 years, SAS has been giving customers around the world The Power to Know(R). Visit us at

SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries.(R) indicates USA registration. Other brand and product names are trademarks of their respective companies. Copyright(c)2002 SAS Institute Inc. Cary, NC, USA. All rights reserved.


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