Detech
Managing Financial Uncertainties Made Easy

Since the COVID-19 pandemic’s outbreak, the financial market volatility has spiked to levels last seen during the global financial crisis. Prices of risk assets have fallen sharply, credit spreads have jumped, and market liquidity has deteriorated significantly, setting the world of financial services reeling; practitioners and regulators alike are compelled to navigate treacherous waters to ensure financial stability and success of the institutions.

Against this challenging backdrop, what can financial institutions do differently to handle such adversities and ensure survival in these unpredictable times?

Dr. Antti Korhonen, founder and CEO of Detech, an UK and Finland-based Fintech company, believes the answer lies in Scenario-based Dynamic Optimisation. The major challenge today is to prepare for diverse economic and financial market scenarios relating to the consequences of the COVID19 pandemic. Managing uncertainty is the key issue in the current crisis environment.

Detech’s solutions are mitigating these challenges by helping financial institutions to prepare for multiple scenario developments simultaneously and by providing decision-makers with concrete scenario specific action plans. The software computes optimal and dynamic strategies and allows fast updating of the strategies if unprecedented events happen in the market.

“Solid scenario planning identifies future risks and helps build resilience. Alongside, it also reveals new opportunities for businesses to prosper after the crisis and beyond. It gives a good understanding of the impact of management decisions and helps institutions to objectively substantiate the strategy required to achieve their business goals,” tells Dr. Korhonen.

Ensuring short-term survival as well as long-term success requires a holistic view of different scenarios` impact on a company’s profitability, solvency, liquidity and risks and that is precisely what Detech’s sophisticated strategic financial management software does. The software’s powerful scenario analysis leads to efficient control of uncertainty and enables businesses to prepare for unprecedented changes in operating environment. What’s more, the software considers multiple management goals simultaneously helping decision-makers to identify optimal trade-offs between the desired business objectives. In other words, by bringing together forward-looking scenario analysis, management goals, regulations and risk analytics, Detech solution provides financial institutions with strategies that enable them to be more efficient, produce better results and manage future uncertainties in the best possible way.

“Our mission has always been to secure the financial standing of institutions under uncertainty and to avoid the drastic societal consequences of financial crises,” Korhonen adds.

Besides the efficacy of its software, another factor that sets Detech apart in the marketplace is its flexibility. The modular structure of the software allows solutions tailored to the needs of customers of any size and the tool may easily be applied to a wide range of problems in terms of both scale and contents. Due to the variety of features users are able to create tailored applications relevant to the actual problem at hand.

Dr. Korhonen has started his research on optimisation technology in finance decades ago and has been an early adopter of mathematical optimisation based prescriptive analytics. It is a scientific approach for solving complex business planning problems and is the most advanced level of business analytics with its ability to provide optimal action plans for meeting desired business objectives.

“Our offerings have their origin in Operations Research and they have also benefited from my long-time involvement in the European OR Group in banking. I developed the first in-house banking solution in the 80’s and since then we have been in the forefront of optimisation based solutions. Today our solutions represent ready-made industry specific applications with extensive analytical features,” explains Korhonen.

Simulation-based methods have been widely applied for a long time in the financial technology but their capabilities are limited for today’s complex business decision-making. More advanced next-generation technologies like optimisation based prescriptive solutions have become feasible and can deliver significantly more value for steering companies forward through uncertain times.