NEW YORK--(BUSINESS WIRE)--Fintech startup Straterix emerged from stealth today, after its AI-powered software proved critical in enabling some of the biggest banks in the U.S. to comply with the Federal Reserve’s stress tests.
“Straterix software is revolutionary: for the first time, it allows financial institutions to quickly and comprehensively stress test themselves, and to do so on an ongoing basis,” says Alla Gil, Founder & CEO of Straterix, and a former head of investment-banking strategy advisory at Goldman Sachs. “Our software dramatically reduces the resources banks need to devote to the process; you could say we take the stress out of stress-testing.”
Using proprietary algorithms, machine-learning and data-mining, Straterix enables financial institutions to rapidly identify the specific stress scenarios relevant to them (out of thousands of possibilities, many of them unprecedented), determine their impact and perform sensitivity analyses.
In doing so, Straterix is helping institutional clients reduce the near $30 billion1 the industry spends complying with stress tests, while cutting the time spent on stress scenario design from months to days.
“One of our major U.S. bank clients had faced repeated criticisms for its scenario design practices,” recalls CEO Alla Gil. “But identifying the cause was like looking for a needle in a haystack. So the bank turned to Straterix. Our software quickly sifted through nearly 1,000 variables to find the three that had been overlooked, resolving the issue.”
Ahead of this year’s stress tests, there was talk of banks returning “excess” capital to shareholders. “Doing so carries risks,” says Alla Gil. “By incorporating Straterix’s customised stress-testing solution in their day-to-day activities, banks and regulators can continually see how much capital can be safely released - and when it needs to be replenished.”
Notes to Editors:
1. Founded in 2015, Straterix is based in New York, with an R&D centre in Tel-Aviv.
2. Straterix is profitable, with revenues more than doubling each year.
3. Alla Gil is a former head of IB strategy advisory at Goldman, with almost a decade’s experience in stress-testing: http://bit.ly/2sWDvQn
4. Straterix co-founder and CTO Joseph Dafni headed credit risk technology for JPMorgan's wholesale business: http://bit.ly/2sWSHga
5. Straterix competitors include Moody’s and Blackrock.
1 According to ALM Intelligence, as referenced in https://bloom.bg/2rNKu09