How XBRL web services impacts credit and risk assessments

Of all the decisions companies face, risk evaluation is perhaps the most fundamental. Yet, in the midst of an Internet-driven information revolution, most companies' risk-assessment processes are still manual, data restricted and paper based. The upshot? The vitally important task of risk evaluation itself is quite risky. XBRL Web services is changing those processes, enabling companies to overcome the practical limitations on how much information can be included in both initial and ongoing risk assessments and how frequently they can be performed.

Whether the risk assessment is for lending, covenant-compliance monitoring, asset quality, customer penetration, claims ratios, product innovation or strategic management decisions, XBRL Web services can make risk assessment processes cheaper, easier, faster more comprehensive and, ultimately, capable of producing results that are up to date, even up to the minute.

Benefits of deploying XBRL web services

By XBRL Web services enabling storage and analytical applications associated with risk determinations and providing third parties with XBRL Web services enabled forms in which to enter their information, companies receive ready-to-use data. The ability to skip manual preparation and move information directly into analytical software immediately upon receipt provides key benefits that can lower risk exposure, including:

  • Greater transparency through a data platform that facilites more consistent and comprehensive analysis;
  • Easier data discovery, recognition and selection from customer sourced files as well as internal sources;
  • Faster turnaround between events and decisions; and
  • Broader scope of risk analyses to incorporate data related to key performance indicators that were difficult or impossible to track before.
XBRL Web services can greatly increase information accessibility and re-usability relative to today’s manual processes. Combined with ever-growing amounts of computer processing power, XBRL Web services will make it possible to base risk assessment decisions on literally hundreds more inputs at relatively low cost.

To learn more

The credit and financial management review, "XBRL: streamlining credit risk management" second quarter 2003 (32kb)

Banking issues update, "XBRL web services: Reducing the risk of credit risk processes" February 2003 (190kb)