Wolters Kluwer Compliance Solutions Offers Insights on Managing Risk Appetite

Rhea-AI Summary

Wolters Kluwer Compliance Solutions emphasizes the importance of risk management in commercial lending, highlighting the role of automation tools to improve transparency in loan portfolios. According to Vice President Suzanne Konstance, identifying unperfected liens is crucial to mitigate potential risks. Utilizing AI and automation can enhance data accessibility, enabling lenders to make informed decisions and strengthen their risk management strategies. The company reported €5.5 billion in 2022 revenues, demonstrating its significant market presence.

Positive

• Use of automation tools and AI improves risk management in lending.
• Greater data transparency helps lenders identify issues before they escalate.

Negative

• Presence of unperfected liens poses risks to lenders' portfolios.

Automation tools help lenders identify areas of portfolio risk

MINNEAPOLIS--(BUSINESS WIRE)-- Risk officers arguably hold a more perilous responsibility than perhaps anyone else in a commercial lending organization, as they are accountable for providing input on key risk decisions, tracking risk across multiple business lines and underwriting compliance with their institution’s risk appetite statements and policies. But research shows that inside virtually any lender’s loan portfolio, there are enough unperfected liens to have devastating effects for their organizations.

If potentially problematic issues are identified well before they negatively affect one’s overall loan portfolio risk exposure, such transparency could make a huge difference in bolstering an institution’s lines of defense.

So argues Suzanne Konstance, Vice President and Lien Solutions Leader, Wolters Kluwer Compliance Solutions, in her recent, two-part series published in ABF Journal on effective lien management and its role in helping lenders improve their risk management processes and portfolio performance. In “Picking the Right Technology for a Bullet-Proof Risk Appetite Statement,” she shares specific examples of data variability and how advances in technologies such as artificial intelligence are ushering in a new era of data transparency and access to lien and debtor data.

“Data that can help better calculate secured lending risk exposure is not only available, but easy to understand when it’s filtered through the right lens. AI and other automation tools in particular make up some of the newer and evolving technology that is helping to improve data transparency and access,” she writes. “These technologies can help financial institutions better understand the nuances of their secured position and empower them to make more informed decisions. From loan operations to the chief risk officer, it’s easier to have the data that matters most in today’s environment than ever before.”

Konstance cites some of the ways in which unperfected liens “can taint a lender’s portfolio,” and presents a series of questions to help lenders identify those issues and get them to the root of a more effective lien management approach in their institution.

“Lien management affects a financial institution’s risk profile in a significant way and, accordingly, should be a part of a risk officer’s daily agenda,” she argues. “Historically, liens have been viewed as binary, i.e., they were considered to be either secured or unsecured, so the complexity that exists with liens was not even on lenders’ radars. But locating the loan review process within a bank and seeing how lien perfection is managed can provide useful insights about how and where a bank is vulnerable to risk.”

Her insights center on ways that lenders can tap new levels of data transparency, providing timely and meaningful access to critical lien and debtor data.

“Overall, lenders benefit from greater transparency and automation in helping manage this risk,” Konstance concludes. “Determining what tools and capabilities can be added to one’s lending operations and risk management areas can go a long way in helping lenders capture insights into their loan portfolios and create a RAS structure for managing those assets more effectively.”

About Wolters Kluwer

Wolters Kluwer (EURONEXT: WKL) is a global leader in information, software, and services for professionals in healthcare, tax and accounting, financial and corporate compliance, legal and regulatory, and corporate performance and ESG. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services.

Wolters Kluwer reported 2022 annual revenues of €5.5 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 20,000 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.

For more information, visit www.wolterskluwer.com, follow us on LinkedIn, Twitter, Facebook, and YouTube.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230328005269/en/

Media Contacts for Wolters Kluwer Financial & Corporate Compliance division:

(Wolters Kluwer Compliance Solutions and Wolters Kluwer CT Corporation)

Paul Lyon

Senior Director, External Communications

Global Branding & Communications

Wolters Kluwer

Office +44 20 3197 6586

Paul.Lyon@wolterskluwer.com

David Feider

Corporate Communications Manager, Banking & Regulatory Compliance

Wolters Kluwer

Tel: +1 612-852-7966

David.Feider@wolterskluwer.com

Source: Wolters Kluwer

FAQ

What recent insights did Wolters Kluwer provide regarding risk management?

Wolters Kluwer emphasized the need for automation tools and AI to improve data transparency and identify unperfected liens in commercial lending.

How did Wolters Kluwer's revenue perform in 2022?

Wolters Kluwer reported annual revenues of €5.5 billion for 2022.

What is the role of AI in commercial lending according to Wolters Kluwer?

AI helps improve data transparency, enabling better decision-making regarding secured lending risk exposure.

What are unperfected liens and why are they a concern for lenders?

Unperfected liens can taint a lender's portfolio, making it critical for risk management processes.

What are the benefits of automation in lien management?

Automation provides timely access to critical lien and debtor data, enhancing lenders' risk management capabilities.