The global banking sector has undergone a major transformation over the past decade. Increased regulatory pressure, volatile market conditions, and the changes brought about by digitalization have forced financial institutions to adopt more sophisticated, data-driven, and sustainable solutions in risk management. This is where our Financial Risk Solutions Department comes in.

As a consulting and software integration firm that builds the risk management approach of the future today, we provide end-to-end solutions to organizations in many areas, primarily Asset-Liability Management (ALM) and Market Risk.

Active-Passive Management: Maintaining Balance is Now More Complex

Asset-Liability Management (ALM) is a cornerstone for banks to manage interest rate risk, liquidity risk, and balance sheet mismatches. However, in today’s world, this management has gone far beyond traditional ALM practices.

Interest Rate Risk: A New Era with IRRBB

The Interest Rate Risk in the Banking Book (IRRBB) framework, last updated in 2023 under the Basel regulations, was actively launched in 2025 with a communiqué from the Banking Regulation and Supervision Agency (BDDK). This process fundamentally changed how banks measure, monitor, and report interest rate risk on their balance sheets. IRRBB mandates risk measurement through both economic value-based (ΔEVE) and net interest income-based (ΔNII) stress scenarios.

In this context, banks are required to:

• Analyze portfolio sensitivities using standardized shock scenarios,
• Transition to advanced models for behavioral assumptions (early deposit closure, early loan repayment, core demand deposit life),
• Monitor the distribution of risk within the balance sheet on a segment basis,
• And report all these outputs to regulatory authorities in a compliant format.

This transformation affects not only risk measurement but also many strategic issues, from data architecture and IT systems to human resources and governance processes. At this point, we offer our clients both technology infrastructure and methodology consulting with advanced IRRBB models and regulatory-compliant data pipelines.

Liquidity Risk: The Transparency Era with LCR and NSFR

Particularly highlighted by Basel III after 2008, the LCR (Liquidity Coverage Ratio) and NSFR (Net Stable Funding Ratio) indicators aim to increase banks’ resilience to short- and long-term liquidity stresses. However, calculating these ratios realistically, in a timely manner, and with internal consistency is often a complex process.

Liquidity stress tests, simulation techniques fueled by the diversity of funding sources and behavioral assumptions, have become one of the most critical areas for testing the capabilities of ALM systems. These capabilities are especially vital during a period when central banks are limiting liquidity injections.

Stress Testing: Corporate Reflex Beyond Regulation

Modern investment trusts (ALMs) are tasked not only with legal requirements but also with developing a strategic risk response. Institutions that can conduct multi-dimensional stress tests against scenarios such as interest rate shocks, sudden deposit outflows, or market contractions are prepared not only for regulations but also for the future.

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Market Risk: A New Paradigm with FRTB

Announced by the Basel Committee in 2019 and being implemented in many countries, the FRTB (Fundamental Review of the Trading Book) has virtually rewritten the rules of the game in market risk management.

Sensitivity-Based Approach (SA-SBM): Complex Simplicity

The new standard approach, the Sensitivity-Based Method (SBM), replaces traditional Basel II methodologies, mandating delta, vega, and curvature calculations based on risk factors. This requires banks to build their risk models at a more granular level.

The necessary steps include:

• Measuring the sensitivity to risk factors for each transaction,
• Calculating margins using bucket breakdown based on risk classes (interest rate, credit spread, equity, FX, commodity),
• Applying risk factor correlation matrices,
• And standardizing the calculation of final capital requirements.

These are not only mathematically complex but also require significant technical infrastructure in terms of data quality, computational engine capacity, and regulatory compliance reporting.

Internal Methods (IMA): VaR vs. ES?

Value-at-Risk (VaR) and Expected Shortfall (ES), fundamental building blocks of internal models, have received new interpretations with FRTB. VaR measures the maximum loss a portfolio can experience at a specific confidence level and within a given timeframe, while ES reflects the average of probabilities exceeding this loss, offering a more conservative metric.

Within the FRTB framework, VaR is now considered not only in risk measurement but also as a backtesting criterion, while ES has become the primary indicator in capital calculation. This increases the importance of larger datasets, robust simulation infrastructure, and statistical validation processes.

The use of internal models under FRTB is subject to much stricter conditions than before. The necessity of proving the modelability of risk factors (modellability testing), backtesting performance, and assumption accuracy make it difficult to move the IMA method beyond being a theoretical ideal.

However, for institutions with high-volume and complex portfolios, this method remains a significant opportunity to provide a capital advantage. Our role here is… To establish the necessary model infrastructure, ensure data continuity, and produce audit-ready documentation alongside relevant technical/theoretical/practical training.

Our Team: We’re in the Field with Interdisciplinary Expertise!

We are not just a technology company providing software; we are also a team that blends consulting, training, and implementation experience in the field of financial risk management. Our team is dynamic and experienced in banking, academia, and consulting disciplines. In our service processes, we not only solve problems but also ensure more effective communication between our clients’ IT and Business Teams, providing our stakeholders with lasting knowledge and practical transfer through a “teaching by doing” philosophy.

Sustainability and Success: From Turkey to the World

To date, we have successfully implemented numerous projects and collaborated on many projects, primarily in Turkey, but also in Europe and the Gulf countries. The solutions we develop not only address the present but also offer future-proof, modular, and scalable structures.

We proceed with a unique architectural approach for each project, guided by the principle of sustainability. We strive to ensure that risk management is not only about compliance but also a fundamental determinant in strategic decision-making processes.

The future of financial risk is shaped by transparency, speed, and analytical depth. We are ready to build this future together with you.