Empower Your Organization with a Single Source of Truth
Empyrean Planning and Empyrean Profitability provide the cornerstone for an efficient, integrated and robust financial performance management process for financial institutions. Empyrean leverages a single framework for data, calculation and reporting across all Empyrean risk and performance management solutions.
Empyrean Profitability™
Designed specifically for banks and credit unions to support your measurement and analysis needs, Empyrean Profitability™ combines sophisticated profitability measurement approaches, with easy-to-use interfaces and analytical tools to support better decision making. In today’s challenging banking environment, defined by inherent volatility, changing customer demands and increased regulatory mandates, the need to understand where your profits are coming from, and how to maximize earnings is paramount. Empyrean Profitability™ accurately measures instrument-level profitability on a risk-adjusted basis, aggregates and analyzes those results at any level of the organization.
A comprehensive and granular profitability solution
Empyrean Profitability™ supports all levels of profitability measurement and analysis, including: Customer, Relationship, Officer / RM, Product, Business Unit / LOB, etc. by calculating profitability at the individual instrument level. It provides both accuracy and consistency, as profitability is first measured at the lowest level, and then aggregated to allow analysis for any segment of the institution based on a single set of results.
In addition, Empyrean Profitability™ incorporates all components of the profitability equation, including: Net Interest Margin, Non-Interest Income & Expense, Provision, and Capital. Empyrean provides a robust tool set to allow the calculation and attribution of each of these components to the instrument level. With Empyrean Profitability™ you can not only ensure a complete picture of profitability, but also drive analyses on both a dollar- and risk-adjusted return on capital basis (RAROC).
Accurate, defendable and bottom-up
The foundation of Empyrean Profitability™ is the calculation of profitability at the instrument level. For any segment, profitability is not based on averages or arbitrary rules and allocations from higher levels, it is simply aggregated from the instrument level. To accomplish this, Empyrean Profitability™ includes a set of configured tools that allow you to attribute costs, provision for loan loss and capital to the instrument level based on the approaches that make the most sense for your institution. In addition, Empyrean leverages its proven matched-term FTP module to calculate transfer credits and charges based on the individual characteristics of each instrument. Empyrean’s FTP solution enables advanced capabilities related to FTP calculation methods, prepayments, and liquidity as well as other transfer rate adjustments.
Focused decision making
A single solution for profitability across all segments of the financial institution ensures that you get a complete and consistent understanding of the sources of your profitability. It creates a level of buy-in that traditional siloed profitability solutions have struggled to achieve, which is critical to the success of any profitability initiative. That buy-in across the organization, from executives on down, is critical to leveraging profitability results as a decision-making tool. The consistent measurement and unified view of profitability enable better strategic decisions (pricing, promotions, product strategy, etc.), as well as tactical decisions throughout the organization (marketing, cross selling, customer decisions (pricing, fee waivers, etc.).
By leveraging a consistent data, calculation and reporting framework with other Empyrean risk and performance management solutions, and by providing a sophisticated, yet easy to manage set of rules to calculate profitability across all segments, Empyrean Profitability™ enables an efficient and defensible profitability measurement process. Empyrean Profitability™ allows your organization to focus on making decisions that will maximize return for your stakeholders, whether they be public or private shareholders, investors, members, etc., as opposed to focusing on the maintenance and processing of the profitability results.
Empyrean Budgeting & Planning™
Designed specifically for banks and credit unions to support your budgeting, forecasting, strategic planning and scenario analysis needs, Empyrean Budgeting & Planning™ combines and integrates the best practices, tools, and approaches from Asset/Liability Management (ALM) with the collaborative planning processes needed for budgeting, planning and forecasting. The ability to enter and share both balance sheet and non-interest related assumptions at different product and account levels, and across multiple groups (e.g., Finance, Treasury, HR, IT, Marketing, lines of business, markets, departments and/or individual centers) creates a system with unprecedented planning accuracy and flexibility for the banking industry.
A Comprehensive Planning Platform
Through the sharing of data, assumptions and calculations with the industry’s leading ALM system, Empyrean Budgeting & Planning™ offers a comprehensive, robust and configurable set of capabilities supporting the planning processes in all the areas of the institution. Features include:
- Balance Sheet and Margin Planning: Empyrean’s Integrated Asset/Liability Based Planning (IABP)combines the sophisticated and detailed cash flow-based planning performed in Empyrean ALMTM, with the ability to directly capture growth, spread and product mix assumptions from your line of business experts, creating a truly unique process for balance sheet and margin planning.
- Non-Interest Income & Expense Planning: providing a set of planning and growth assumptions for both non-interest income and operating expenses, allowing for direct input by your managers through an easy-to- use, intuitive web-based interface.
- CAPEX and Prepaid Expense Planning: layer new fixed asset and prepaid expense requests on top of existing fixed assets, prepaid expenses and their corresponding depreciation and amortization schedules for complete planning directly within Empyrean; while also providing the ability to group expenses and plan by project.
- Payroll Planning: a flexible and configurable payroll planning process supporting either GL, job code or employee level planning. The system inherently applies payroll assumptions entered at aggregate levels to the level of detail desired by your institution for what is typically the largest non-interest expense item for most financial institutions.
Flexibility through configuration
Through our extensive experience working with hundreds of financial institutions, we recognize that every organization budgets and plans differently. Empyrean Budgeting & Planning™ is designed to allow your institution to plan the way you want to, at the level(s) that make the most sense for your organization; without requiring customizations. Empyrean Budgeting & Planning™ is an easily supportable software application that can be quickly upgraded as new releases and enhancements are introduced.
Intuitive, transparent and fast
The web-based application is explicitly designed to help both administrators and budget contributors easily enter, process, and analyze budget, plan, and actual data. The need to reduce the learning curve, to minimize training and to enable non-financial experts to navigate the system is cornerstone of the system’s design. At the same time, we recognize that data, calculations, and processes cannot be black boxes – you and your teams need access to detailed, auditable data and results. And finally, the system needs to be fast. In today’s volatile and ever-changing environment, you need answers quickly and efficiently. The processes can’t take hours to run, and your reports can’t take minutes to run. Empyrean Budgeting & Planning™ leverages the same processing technology and approaches that have enabled Empyrean ALM® to perform at speeds unprecedented in the industry.
Shared components and reporting / BI framework
Empyrean offers a suite of risk and performance management solutions that leverage the same data, security setup, calculation engines and a reporting / BI framework. The reporting / BI framework enables Empyrean to deliver pre-packaged budgeting and planning reports and dashboards, while also providing the flexibility for users to create custom analyses, dashboards and reports.
These shared components provide increased efficiency and consistency for users and report consumers across all applications. By leveraging a single data, calculation and reporting framework with other Empyrean risk and performance management solutions, and by providing a sophisticated, yet easy to manage set of rules for budgeting, planning and forecasting, Empyrean Planning enables your organization to focus on making decisions that will maximize return for your stakeholders, whether they be public or private shareholders, investors, members, etc.
Funds Transfer Pricing
Net Interest Income (NII) is the main performance metric for most financial institutions. Is the bank earning enough income to justify the capital allocated by shareholders? How much will NII be impacted by changes to interest rates and liquidity premiums? These are questions an institution must be able to answer in order to effectively manage NII across the various lines of business and through different rate cycles. This is done most effectively through introducing a funds transfer pricing process that is both robust and effective in immunizing the business units from interest rate and liquidity risks while transferring them to the mis-match center, where ALCO can effectively manage it.
Consistency across all disciplines
As an extension of the ALM model, Empyrean’s FTP calculations will leverage the same data, behavioral settings, interest rates, other assumptions and calculation engines as all the other balance sheet management functions.
Comprehensive list of methodologies
Empyrean supports virtually every methodology for calculating the base funding rate for every instrument on the balance sheet as well as any add-on charges or credits required by the institution (ie. liquidity premium, OAS, etc,).
Foundation for sound performance measurement
Let Empyrean form the foundation for your performance measurement efforts as the solution simulates and can export FTP rates at the instrument level for all current position instruments and for all forecast periods in every scenario.