Credit Expo, the NovaUCD-based credit risk management company, today announced that it is targeting the international financial market with a new web-enabled version of its credit risk management software. This new version of Credit Expo’s Empirical Credit Risk Management (ECM) software will allow national and international financial institutions to have easier access to a powerful and strategic credit risk management tool. 

 
Patrick Shallow, Founder & MD, Credit Expo

A healthy financial system is vitally important to everyone, borrowers, depositors, investors or taxpayers, and is dependent on disciplined credit risk management. Given the recent financial crisis, there is understandable public interest in ensuring that credit institutions are managing credit risk to the level of best practice.  

To assist with this process Credit Expo has developed and is marketing its ECM software system which can deliver full transparency of a lender's credit risk to senior management.  

ECM is a patented software system for measuring and managing credit risk in instalment and consumer lending. It is an industry-certified system based on statistical algorithms, programmed for loan loss forecasting and provisioning. The scope of the application ranges from tracking well performing, or non-delinquent loans, through to loans having a high risk of default.

The ECM software system, originally launched in 2004 as a client server application, analyses and tracks credit risk from the portfolio level, through various loan characteristics to the account level. The resulting risk assessment can be used by financial institutions to better inform loan pricing and collection management. When credit risk is identified, bad debts are substantially reduced, proper pricing is established, cross subsidisation is eliminated and internal resources can be deployed more rationally.

Speaking at the launch of the new web-enabled version of ECM, Patrick Shallow, founder and MD of Credit Expo said, “To achieve best practice, lenders need to be able to identify the key sources of risk within their portfolios, even before arrears begin to emerge. Firms need to price credit according to risk, thus pursuing economic profit rather than illusory gains.” He added, “Until now our software has been sold as a client server application. With the new web-enabled version launched today the national and international reach of ECM is increased giving global financial institutions the ready opportunity to use our software to perform accurate credit risk analysis.”

Credit Expo, founded in 2003 by Patrick Shallow, a former senior banker, is located in NovaUCD, the Innovation and Technology Transfer Centre at University College Dublin. He was previously Managing Director of the Metropolitan Building Society and of Chartered Trust, the Finance arm of Standard Chartered Bank.  Patrick holds a BComm (Law and Economics) degree from the University of the Witwatersrand, South Africa, an MSc from Trinity College, Dublin. He has recently submitted a PhD thesis on credit risk to UCD’s Michael Smurfit Graduate Business School. He is also a Fellow of the Institute of Bankers of South Africa.

Current ECM clients include leading Irish and US banks and most recently an Irish Credit Union. ECM is Basel II, (capital adequacy), and International Financial Reporting Standards (IFRS, accounting standards), compliant and is Irish Revenue approved for the purposes of provisioning and of profit reporting.

Basel II is an international accord developed by the Basel Committee on Banking Supervision to establish a global standard for how banks and other financial institutions measure and recognise risk.

ENDS

2 June 2010

For further information contact Micéal Whelan, NovaUCD, e: miceal.whelan@ucd.ie, t: + 353 1 716 3712.

Editor’s Notes

Credit Expo is a credit risk management consulting and software company founded in 2003 by Patrick Shallow.

ECM (Empirical Credit Risk Management) is the product of research undertaken into the lending portfolios and best practices of 6 leading Irish banks and of related academic research. The ECM product has been installed in several leading banks in recent years where, with progressive enhancements, it has, also throughout the credit crisis, been providing accurate reporting for management and for regulatory compliance. ECM has been reviewed and approved by the leading auditing houses and by the Irish Revenue Authorities. Research into the risk models of UK and other foreign banks indicates that ECM offers greater versatility, more immediacy and a higher level of discrimination. All ECM forecasts are driven off the lender’s own write-offs and the npv of net recoveries, thereby ensuring full sensitivity to current market prices and conditions, also facilitating stress testing.

NovaUCD, the Innovation and Technology Transfer Centre, is the hub of innovation and knowledge transfer activities at University College Dublin. NovaUCD is responsible for the commercialisation of intellectual property arising from UCD research and for the development of co-operation with industry and business. Twenty-seven knowledge-intensive companies, including Credit Expo, are currently located in NovaUCD. NovaUCD has been funded through a unique public-private partnership that includes AIB Bank, Arthur Cox, Deloitte, Enterprise Ireland, Ericsson, Goodbody Stockbrokers, UCD and Xilinx.