Asset Liability Modeling

alt_moonWhat is ARCSys Asset
Liability Modeling?

ARCSys’ Asset Liability Modeling (ALM) is an account-level financial modeling technique used to assess and manage the balance sheet risks of a financial institution.

In today’s changing interest rate environment, managing your assets and liabilities more effectively is essential. ARCSys’ Integrated Solutions consistently transfers your CECL cash flows into a robust ALM model. Our seamless integration ensures that your deposit data integrates effortlessly with your CECL cash flows. Choose ARCSys today for the best financial solutions available on the market.

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alt_moonAsset LiabilityModeling with ARCSys

  • CECL to ALM Seamless Integration
  • Gap Analysis
  • Detailed Reporting and Analysis
  • Stress Scenarios
  • Economic Value of Equity (EVE) Analysis
  • Net Interest Income (NII) Analysis
  • Integrated Modeling and Forecasting of Demand and Time Deposit Accounts
  • Application of potential qualitative factors to account for unusual market conditions that may influence the projected duration of Demand Deposits Accounts.

Determining an institution’s Economic Value of Equity (EVE) involves applying a Fair Market Value estimate to all of the institution’s assets and liabilities. The resultant variance between the two values represents an implied adjustment of the institution’s equity. Assessing changes in the institution’s EVE across various interest rate scenarios in comparison to the baseline EVE, which assumes no rate changes, offers insight into the institution’s sensitivity to interest rate fluctuations.


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alt_moonWhat Does Your Institution Need to Look Out For?

Determinants of the "Right" Level of Risk

ARCSys recognizes that navigating the intricate landscape of risk involves a thorough understanding of various factors. To operate within a particular business environment, your institution should assess which risks are not only required but also the magnitude of risks you are willing to undertake as you explore new avenues.


Management's Proficiency in Risk Oversight

A key facet of our risk management framework revolves around the capabilities of the institution’s management team. ARCSys assists in evaluating your ability to identify, measure, and monitor financial risk, with a commitment to ensure that the skills of your management are commensurate with the size, nature, and complexity of your balance sheet.


Sufficiency of
Capital, Liquidity,
and Earnings

Questions regarding the adequacy of capital, liquidity, and earnings to absorb your inherent risks should be evaluated. ARCSys believes in an approach that not only anticipates risks but ensures you have the financial strength to weather uncertainties.