Building on the success of its work with Nationwide and Skipton Building Society, risk data and analytic specialist, Jaywing, has been appointed by Secure Trust Bank to develop its stress-testing capabilities as part of a three year engagement.

Secure Trust Bank appointed Jaywing, as it looks to extend its offering into secured residential and SME lending. To do this, the bank will be growing its stress-testing capabilities to be flexible enough to cover a future shift in asset mix, while being relevant to today’s asset profile. Jaywing will employ its stress-testing expertise and forecasting in order to help the bank achieve its goal.

As part of the brief, Jaywing will be responsible for reviewing the existing risk management information and forecasting methodology to deliver robust stressed forecasts. These forecasts will then be used by the bank to understand the inherent risk within its portfolio. The work will have a particular focus on macro-economic factors and will see Jaywing building economic response models to relate the impact of macro-economic factors on the bank’s default and loss rates as well as designing the stress test scenarios to examine severe stress points in the bank’s portfolio.

Jaywing will take a stepped project approach with clear deliverables, insight and information provided at each stage. To help strengthen board level understanding of the stress-testing journey and how the insights gleaned from the process should be applied, Jaywing will deliver a complete, executive-level information pack. The process will be run by Jaywing annually in order to reflect the current portfolio mix and outlook.

Adrian Lingard, Consulting Managing Director at Jaywing, said: “At Jaywing we are known for our skills in data, modelling and analysis; skills that we can bring to our work with Secure Trust Bank. Our analytical rigour and experience working with leading banks and building societies means that we understand the stress-testing process and the complexities involved in forecasting. At the same time we are also able to help senior stakeholders understand the implications of the findings. We look forward to putting these capabilities to use in order to enhance Secure Trust Bank’s offering and help them expand into new markets.”

Kevin Hayes, Chief Risk Officer, Secured Trust Bank adds: “It is vital for us to guarantee a thorough stress-testing process so that we can minimise the risk in our portfolio when expanding our offering. Jaywing really impressed us with their expertise and innovative approach to stress-testing and risk modelling. Bringing Jaywing on board will give us the flexibility we need over the coming years to respond to the changing nature of the asset market and support our move into residential and SME lending.”