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Release date: 4 September 2024
Have you ever wondered how banks ensure and manage their financial stability? This is exactly where the department Treasury & Asset Liability Management comes into play. My work in this exciting area allows me to actively participate in shaping and optimizing the earnings and risk profile of banks, which is ultimately crucial for our clients' success and their resilience in times of crisis.
My name is Juliane, and I joined zeb via the Analyst program five years ago, directly after finishing my Bachelor's degree. This allowed me to gain consulting experience for a year before I was granted leave for my Master’s program. After successfully completing my Master’s degree, I returned to work as a Consultant about two years ago. During my Bachelor’s degree program in Banking & Finance, I also completed an apprenticeship at a bank, which sparked my interest in banks and especially in issues relating to risk management and treasury. Coupled with the desire for more variety and a steep learning curve, this interest ultimately led me to switch from banking to consulting, where I have been involved in treasury & ALM topics ever since. Today I work as a Manager and enjoy supporting our clients with complex finance and risk-related issues.
In my view, Treasury & Asset and Liability Management is one of the most exciting departments of a bank because of its special role. It’s where all the bank’s transactions come together and need to be managed. A well-handled Treasury and ALM function contributes significantly to the bank’s financial stability, especially in times of market volatility and economic uncertainty. Typical tasks include managing and controlling short-term and structural liquidity, optimizing interest income and managing interest rate risk as well as developing and operationalizing hedging strategies.
Interest and liquidity positions are heavily dependent on the bank’s balance sheet structure, which is why managing the composition of assets and liabilities is a key task when it comes to achieving a balance between risk and return. Due to the increasing regulatory requirements in recent years, managing these risks has become even more complex, which requires a high degree of flexibility and expertise.
In the Treasury & ALM area, we work on a wide range of projects, which can be both highly specialized in terms of subject matter and highly technical in nature. Thematically, we cover all aspects of interest rate and liquidity risk management as well as asset and liability management. We support our clients, for example, in developing and implementing risk models, optimizing their liquidity management and designing hedging strategies. Our projects range from strategic consulting and concept development to the technical implementation and customization of systems, which guarantees varied and exciting work.
Deposit modeling: A typical project in our area is the modeling of non-maturity deposits (NMDs). For many banks, these are a cheap and at the same time risky source of refinancing as their interest rate is not contractually fixed and the money can be withdrawn at any time The challenge for banks is to model customer behavior in such a way that earnings potential can be leveraged while risks are correctly assessed. In joint projects with our clients, we develop customized models based on detailed data analyses at the interface between risk management, treasury and finance. These models make it possible to predict customer behavior and support banks in optimizing their interest rate and liquidity management strategies.
Interest rate risk management: Another key project is interest rate risk management, as changes in interest rates affect not only cost and income of banks but also the market values of contracts in the portfolio. We use model calculations to support banks in developing interest rate risk strategies that correspond to the institution’s risk appetite. The aim is to reconcile opposing management impulses, achieve earnings stability and manage capital requirements efficiently. Our customized solutions help banks to optimally manage their interest rate risk positions while safeguarding their earnings power.
Regulatory status quo analyses: The regulatory environment has changed significantly in recent years, particularly in the context of interest rate risks. The requirements have been considerably tightened, so that in combination with the interest rate turnaround, interest rate risk has once again become a hot topic.
We help our clients to understand and structure complex regulatory requirements. Together, we identify fields of action and develop implementation plans that ensure regulatory compliance while taking into account the individual situation of each institution. Our aim is to ensure that risk management does not remain merely a regulatory obligation, but also generates business and risk insights based on which banks can make economically sensible decisions.
In addition to business-related projects, we also support our clients with technical projects such as the implementation of risk models. A bank needs specialized software solutions to measure, assess and adequately manage its interest rate and liquidity position. In this area, we provide our clients with comprehensive advice along the entire value chain – from the selection of providers and the tendering process through to technical implementation. We help our clients to implement technical prototypes, and we program customized technical solutions. Our proprietary zeb.control software plays an important role in this, serving to manage the balance sheet, the income statement and the inherent interest rate and liquidity risks. Working with our clients provides us with continuous input for further developing the software. During the implementation of zeb.control, too, subject-matter and IT experts from our team are on hand to advise clients and provide expert support.
No two days are the same in my work in Treasury & ALM. My everyday life is characterized by a good mix of remote work and on-premises meetings. I usually prepare remotely and only travel to clients for selected meetings or workshops. The projects combine business-related and technical topics and require both quantitative and qualitative work. I particularly enjoy the in-depth analysis of client data, followed by the step of breaking down complex interrelationships and communicating them to the client in a clear and understandable manner. In this way, we ensure that our clients can make informed decisions. In a highly regulated environment, we identify custom solutions that demonstrate how regulatory compliance can be combined with real business or risk insights.
In addition to project work, my most important tasks and responsibilities include heading the market risk topic cluster within our team. Moreover, there is plenty of opportunity to get involved in recruitment or in organizing events, for example, which makes my job even more varied. What I particularly like about my work is the variety. Due to the large number of topics, people and tasks, it never gets boring. I am also motivated by the good mix of quantitative and qualitative work and by operating at the interface between risk and earnings management at banks. Ultimately, I know that my work helps our clients to navigate through a complex regulatory and economic environment, thereby strengthening their resilience.
If you are curious and would like to find out more about the challenges in the world of Treasury & ALM at zeb, don’t hesitate to get in touch with me or my colleagues Manuel Lang and Alexander Rubach. We look forward to talking to you and telling you more about the possibilities of joining our team and zeb!
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