Bank Hapoalim

Traders empowered to make risk-informed decisions with a sophisticated risk management system

Published on 13-Sep-2013

"This solution allowed the bank to establish a common risk management language that empowers the trading floor and management to clearly communicate risk." - Haim Fischer, head of market risk

Customer:
Bank Hapoalim

Industry:
Banking, Financial Markets

Deployment country:
Israel

Solution:
Algorithmics Solutions, BA - Business Analytics, BA - Risk Analytics, Smarter Planet

Overview

Headquartered in Tel Aviv, Bank Hapoalim is one of Israel’s largest banks and a financial market leader around the globe. In Israel, Bank Hapoalim offers a full range of banking services for retail customers and enterprises of all sizes.

Business need:
Bank Hapoalim needed to give dealers more freedom to pursue new opportunities and at the same time stop unsanctioned trades.

Solution:
The bank adopted an analytics-driven risk management system that uses scenario-based simulations to generate accurate risk measures on all of the bank’s trading activities on a daily basis.

Benefits:
Bank Hapoalim provides accurate risk measures to trading floor managers on a daily basis.

Case Study

Headquartered in Tel Aviv, Bank Hapoalim is one of Israel’s largest banks and a financial market leader around the globe. In Israel, Bank Hapoalim offers a full range of banking services for retail customers and enterprises of all sizes. Overseas, the bank operates through branches, subsidiaries and representative offices that primarily serve as wealth management hubs and trade enablers.

The Opportunity
Bank Hapoalim needed to give dealers more freedom to pursue new opportunities and at the same time stop unsanctioned trades. It also sought to maximize returns while meeting minimum capital reserve requirements.

What Makes It Smarter
The bank adopted an analytics-driven risk management system that uses scenario-based simulations to generate accurate risk measures on all of the bank’s trading activities on a daily basis. The new insights allow managers to set meaningful limits on trades so that dealers can respond with speed to marketplace shifts and investor requests yet not engage in trades that haven’t been run through the system for risk analysis.

Real Business Results
Bank Hapoalim provides accurate risk measures to trading floor managers on a daily basis, allowing dealers to work with deeper insight into trading activity and confidently make analytics-driven decisions involving approximately 70,000 daily deals, 40 instrument types, 300 portfolios and 4,000 risk factors. At the same time, the company reduced unsanctioned trading by 100 percent because dealers are not permitted to trade or take a position in an instrument that cannot be loaded into the system for analysis. Greater transparency into risk exposure also allows senior managers to make risk-aware business decisions that optimize capital allocation, improve bank profitability and facilitate better returns on customer investments.

For More Information
Please contact your IBM representative or IBM Business Partner. Visit us at ibm.com/algo.

To learn more about Bank Hapoalim, visit www.bankhapoalim.com.

Products and services used

IBM products and services that were used in this case study.

Software:
Algo Market Risk

Service:
Software Services for Information Management

Legal Information

© Copyright IBM Corporation 2013 IBM Corporation Software Group Route 100 Somers, NY 10589 Produced in the United States of America September 2013 IBM, the IBM logo, ibm.com and Algo are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The performance data discussed herein is presented as derived under specific operating conditions. Actual results may vary. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.