Automated VaR Calculation & Reporting at AXA Bank Belgium (part of Crelan Group)
AXA Bank Belgium (ABB) is the 5th largest bank in Belgium, offering retail banking services to individuals and small business customers. ABB was acquired by Crelan Bank in 2021, expanding its balance sheet substantially to €53 billion. Today, AXA Bank Belgium enjoys the support and trust of 860,000 customers, primarily focused on credits, investments, and daily banking services and deposits.
AXA Bank Belgium’s financial risk team used legacy software and an Excel-based tool for value-at-risk (VaR) calculations to assess and manage market, interest, and counterparty risks. These calculations, which are aggregated into reports on a daily, monthly, and quarterly basis, are used by the bank’s stakeholders to make sound investment decisions as well as for regulatory submission purposes.
The reliance on legacy tools led to several operational hurdles. The process of calculating and aggregating VaR calculations into reports proved to be time-consuming and resource-intensive. The team found themselves grappling with the execution of repetitive manual tasks, which could potentially have led to errors in the critical risk assessment and reporting processes.
As ABB’s software license agreement was coming to an end, it decided to challenge the status quo of its processes and solutions, and reassessed whether its capabilities were sufficient and scalable to its new projects and growing derivatives portfolio.
While the previous platform AXA Bank Belgium utilized could calculate VaR and generate reports, it offered a very limited level of automation. The end-to-end process from setting up data and implementing adjustments, to performing computations and reporting, took its team a good 3 hours. The bank recognized the need for an interactive platform that could simplify the process and shorten the turnaround time as well as improve the quality of the reports produced.
AXA Bank Belgium and Yields.io grew together. The support we received from the team from the beginning until now has been very good which for us is an important factor in choosing a technology partner. Chiron App helped us scale and automate our activities, resulting in an 80% time savings.
Financial Risk Manager at AXA Bank Belgium
AXA Bank Belgium anticipated that automating calculations would shorten the time needed to calculate and produce reports. The bank weighed up the pros and cons of developing technology in-house and started speaking to different technology providers to learn the benefits and added value of different solutions. After careful consideration and market research, it became convinced that outsourcing a vendor solution from Yields.io would bring the most value and save costs.
Ultimately, the decision to implement Yields.io’s solution, Chiron App, was primarily due to the support the bank would receive prior to, during, and post implementation, the flexibility to customize the platform without requiring tedious manual intervention by the team, and the significant time-saving improvements the solution offered.
The implementation of Chiron App was made possible by Yields.io sticking to a strict timeline, and offering dedicated technical support in all phases, to ensure a smooth transition. Not only has Chiron App enabled the ABB team to shorten the turnaround time from 3 hours to 30 minutes, but it has also allowed them to change parameters on a day-to-day basis with little to no coding required, and to customize reports easily to get a better view of different limits and anomalies.
The financial risk management team now employs Chiron App on a daily basis for VaR calculations and reporting, sensitivity analysis, as well as monthly and end-of-quarter reports, resulting in a 25% reduction in required FTEs. Yields.io empowered AXA Bank Belgium to dynamically evolve and meet the challenges of its expanding portfolio effectively.