insights into mc+
Quantify your organisation’s operational risks quickly and affordably
Being able to quantifying your operational risks has many benefits, including:
Like-for-like comparisons of risk profiles across disparate business lines
Regulatory capital calculations at specific confidence levels
‘What if’ analysis of capital benefits from proposed control enhancements
Weighing risk-reducing features of new projects or products against traditional ‘costs and revenues’
Checking the ‘value for money’ delivered by your insurance programmes
But quantifying operational risk is often a complex and costly exercise
Easy to use
Robust & powerful
Improves the focus of decisions
Unlike traditional Monte Carlo approaches, mc+ is quick and easy to use. It relies on an understanding of the problem and familiarity with the data – the reliance on data is not lost, just placed in the hands of people who can interpret it and make it relevant for the firm. In this way, the frequency and severity of each key risk become the dominant attribute – providing tremendous flexibility while retaining analytic integrity.
The input requirements are light but provide enough specificity to be meaningful analytically and to support both capital analysis and resource allocation. The design of mc+ provides for limited inputs without sacrificing analytic power; the result is a fully-flegded risk analysis for capital requirements capturing the key risk exposures and dependencies that drive the firm’s capital needs.
Through data construction (i.e. specifying inputs), the process captures the insights of the people who know best the firm’s risk exposures – your subject matter experts. Because distributions are not merely computed from data which may not be comparable, the mc+ approach avoids the scaling problems that are inherent in use of external data sets for operational risk.
Because it is simultaneously powerful, flexible and easy to use, mc+ offers instantaneous analysis to support decision-making around risk capital and resource optimisation. Unlike traditional risk analyses, mc+ can be run and re-run rapidly, while decisions are being made; it’s that quick – without sacrificing analytic rigour or reference to the firm’s real risk exposure. Because it uses subject matter experts’ inputs, discussion at the firm focuses where it should: on what risks mean for the firm and what to do about them.
an indispensible part
of your decision-making toolkit
Click the circles for more
t: +44 (0)20 7859 4667
m: +44 (0)7432 633984
Economic Capital Solutions Ltd
2 Gallery Court 1-7
London SE1 4LL