DISADVANTAGES OF ANYLOGIC SOFTWARE

Risk-taking is the basis of banking sphere. The growth (reduction) scenario of the balance management statements (loans, deposits, current volatile customer accounts, etc.), changes of interest rates and nominal terms of financial instruments can be used as the model input parameters. Estimation of the financial indicators can be delivered by simulation of the bank balance management at the required time period. The following items can be used as financial indicators: Net Interest Margin, ROAE, ROA, Cost / Income, Deposit / Loans, Growth in Net Income. The forecast of the bank financial performance for the quarter or a year and its comparison with the budget assignment for the corresponding period of time is one of the important issues. The detailed report on the properties of the Assets & Liabilities Statement for the definite time period (balance amount, average weighted interest rate)is formed at the output of the model. The following market behavior scenarios can be used: The model analyses the dynamics of aggregate financial results indicators within a definite period of time for the definite market behavior and the management of the assets and liabilities.

DISADVANTAGES OF ANYLOGIC SOFTWARE

The model developed in AnyLogic simulation software provides much more accurate forecast of the financial result and helps to choose the most effective managerial decision. It is often made with the help of MS Excel and the software of statistic modeling. FINANCIAL RESULTS AND BANK KPI FORECASTINGĮvery bank tends to forecast the financial result and its fluctuations depending on some managerial decisions, such as the increase of a loan portfolio due to decrease of the loan interest rate. The structure of the subsidiaries’ reserved money is formed at the output of the model. The quantity of current customers’ account balances, prospective incoming and outgoing payments to the subsidiaries’ accounts are set at the input of the model. The simulation modeling task is to define the sum of money which the bank should earmark for the ongoing operations of the holding company. The part of money from master account is taken by the bank, which increases the bank’s yield. This service allows holding companies to combine their subsidiaries’ accounts and effectively divide money between them to have a single overdraft limit.

Notional cash pooling has the company combine the balances of several accounts. Recently the new service of cash pooling has appeared in Russian banking system. The definite schedule of ATM cassette renewal, the order of renewal and amount of cash for each ATM are formed at the output of the model. The location of each ATM stations, the remaining amount of cash and frequency of usage are set at the input of the model. A simulation model can deal with a complex task: it can define a schedule of the ATM cash loading and proper volume of cash it can also optimize the route of cash-in-transit guards who renew the ATM cassettes. The accumulation of the excessive amount of cash in the ATM is another unwanted situation. Stoppages occur when the ATM cassette is empty and the client receives a denial of the request for cash.

It is inevitable that some stoppages during ATM network operations would appear. This helps to maximize yields and guarantees a rated delay on the current payments. A simulation model analyses the current state of correspondent accounts balances, incoming and outgoing payments transactions, clients’ requests and forms a daily balance. The absence of models which can forecast their behavior can lead to unnecessary interest expenses and insufficient yields. We need to pay attention to the fact that the behavior of the items which affect the state of liquidity is quite stochastic. High balances of the correspondent accounts lead to the yields reduction, but credit organizations tend to maintain high balances due to liquidity risks and ongoing payments support. LIQUIDITY MANAGEMENTĬurrent correspondent accounts balances form the essential part of the bank liquidity. The list of issues is not exhaustive, it reflects some tasks that have been discussed by XJ Technologies and AnyLogic users - banking organizations. This paper contains some banking issues that can be successfully resolved by the users of AnyLogic – multimethod simulation tool.

Disadvantages of anylogic