Industry Challenge
In a market where mortgages are more transferable than ever, the need for reliable analytics is critical.
InCol Intelligence© has been designed to address the increasing need for versatile and focused analytics across the ever-broadening user base.
InCol Intelligence© addresses cross-functional inefficiencies and duplication, replacing multiple spreadsheets and establishing a single source of data truth for all users.
The platform has been designed to combine proprietary data with third-party and public data to facilitate optimal credit, climate, physical risk analysis, and ESG, funding, regulatory and capital management reporting.
These are real challenges for an industry with a growing and varied user base with increasing information requirements.
Why use InCol Intelligence©?
InCol Intelligence© is an interactive management information, analytical, and reporting platform for all mortgage stakeholders. Data capture and upload is easy-to-use and is based on the ECB/BOE RMBS and ESMA Templates. Upload of the user’s data can also be facilitated through an API.
The platform is designed to give push-button clarity internally to Finance Directors, Risk Officers, Treasurers, Credit Departments, and externally to relevant parties, such as funders, investors in securitisations, covered bonds, and significant risk transfer (SRT) transactions, along with regulatory authorities and potential purchasers of mortgage portfolios. It takes care of complex data manipulation and analytical processes.
This easy-to-use system delivers information through 50+ interactive dashboards in graphical, tabular, and granular detail from a range of input cells on the ECB/BOE RMBS and ESMA Templates.
The platform overlays a mortgage originator's proprietary data with third-party and public data on a granular basis covering, Cladding, Erosion Assessment, Historically Flooded Properties, Properties with/without/claimed Flood Insurance, AVM, Rental Analysis, and Google Maps location - all areas of growing importance and focus for the mortgage market’s widening and diverse stakeholders.
Reports are available on-screen, are exportable to Excel and can be sent as PDFs, images, or in PowerPoint.
What does it do?
InCol Intelligence© allows a user to:
Analyse
Detailed analytics to include interactive analysis by Region, Product, Arrears, LTV and Indexed LTV, Repayment, Fixed Maturities, Borrower, Postcode Concentration, Origination, and Inception information. For BTL, rental analysis for a given back-book including DSCR Stress Test, Rental Income Statistical Mean Price (area specific), last listed for sale, and last sold.
Project
- 5-year scenario analysis (across different asset classes).
- Capital Requirements.
- AVM and Loss Given Default Valuation.
- Portfolio Valuations.
- Simple Cash Flows.
Compare
Time series Variance allowing MoM, QoQ, YoY comparison and monitoring of loan portfolios. Fixed-rate maturity profile (including broker introduction and arrears exposure). Comparison of fixed-rate maturing mortgages with an entity's current credit policy to highlight any outliers.
Create
Create, design, and manage the asset makeup of an individual portfolio. The platform can virtually tag a portfolio and ringfence this new portfolio for further analysis under the Portfolio Creator feature. External stakeholders can be given access to such portfolios for their analysis. Ideal for the lifecycle management of securitisations or portfolio sales. The platform can produce BOE/ECB/ESMA reports at the touch of a button.
Identify Climate Risk Factors
Identifies physical risk factors affecting the portfolio (ideal for preparation and management of securitisations or portfolio sales), including Physical Risk Assessment, with Fluvial, Pluvial, Tidal, and Erosion information, Green Asset Ratio, EPC Ratings and Carbon Emissions.
Determine Portfolio Valuations
The InCol Intelligence© Valuation Model can produce portfolio valuations for various interested stakeholders at the touch of a button. These valuations can further be enhanced by applying an up-to-date property valuation using third-party Automated Virtual Survey Models, giving the user an even more accurate result. The model can be used in banks' Solvent Wind Down Plans and Recovery and Resolution Plans for building societies.
InCol Intelligence© delivers Climate-Related Risk Management | Decision Making | Reporting
InCol Intelligence© uses client proprietary data, captured through the Bank of England and ECB reporting templates, and combines this seamlessly with external datasets to provide for the rapid and reliable identification, evaluation, monitoring, and reporting of risk for a mortgage business, specific mortgage portfolios or even at the individual property level.
InCol Intelligence© combines proprietary mortgage portfolio data with Flood, Climate Intelligence and Energy Performance Certificate data and analytics to deliver comprehensive risk management, decision-making and reporting outputs.
Physical risks resulting from climate change can be acute (driven by events such as flooding or storms) or chronic (arising from longer-term shifts in climate patterns), each presenting increasing financial risks. The flood and climate risk data provide a present-day physical risk profile for existing mortgage exposures and provide simulations and insight into the probable future impacts under different climate scenarios. This allows for climate risk-informed decisions and mitigation strategies to be conducted.
InCol Intelligence© enables users to quantify the financial impact of climate change at the asset and portfolio level to enable meaningful risk management, decision-making and reporting.
Detailed information on:
These climate scenarios are based on the internationally recognised Representation Climate Pathways (RCP). They are designed to model climate scenarios to predict how concentrations of greenhouse gases in the atmosphere will change based on assumptions about the economic, social and physical changes to the environment and their impact on climate change.
There are three RCP pathways detailed within the platform as follows:
- RCP 2.6 (‘low emissions’)
- RCP 6.0 (‘medium emissions’)
- RCP 8.5 (‘high emissions’)
InCol Intelligence© integrates the projections under RCP pathways 2.6, 6.0 and 8.5 with the relevant proprietary mortgage data.
The Domestic Minimum Energy Efficiency Standard (MEES) Regulations are a crucial part of the UK’s strategy to improve the energy efficiency of rented properties and reduce carbon emissions in the domestic sector. Under the MEES Regulations, privately rented domestic properties must have a minimum Energy Performance Certificate (EPC) rating of E (ratings run from A to G).
These standards are set to become stricter in the future. Buy-to-let mortgage providers must consider these regulations carefully in their lending criteria, risk assessments, and product offerings. Adapting to these changes helps manage risks and presents an opportunity to support the transition towards a more energy-efficient housing market in the UK.
The Portfolio Creator
Using the Portfolio Creator, mortgages with outlier/specific features can be highlighted, and an existing or future portfolio can be ringfenced (e.g. to create a Green Portfolio). These assets can be tagged, and virtually ringfenced for use in specific transactions. This functionality allows for the creation and pre-positioning of a portfolio in preparation for a securitisation, covered bond, pledging to a central bank, portfolio sale, or Significant Risk Transfer transactions and for the management reporting during the lifecycle of such a transaction.
Specific access can be given to external stakeholders (warehouse line providers, rating agencies, forward funders, investors, corporate servicers, etc.) to easily allow for, and complement, their third-party analysis.
InCol Intelligence© Delivers a Strategic Advantage
Embedding Flood, Climate, and EPC data is strategically important for buy-to-let mortgage business stakeholders, given the growing awareness of climate-related risks and the transition to a low-carbon economy. Regulatory expectations are for financial institutions to lead the global economy to Net Zero.
InCol Intelligence© benefits the Buy-to-Let Mortgage sector by delivering more effective and focused:
Risk Assessment and Pricing
Mortgage providers incorporate EPC, climate, and flood data into their risk assessment models. Properties with poor EPC ratings, high flood risk, or areas vulnerable to climate change may be considered higher risk, potentially leading to higher interest rates or stricter lending criteria.
Portfolio Management
Providers may review their loan portfolios to identify exposure to climate-related risks, including energy inefficiency and flood risk. This can inform decisions about future lending and strategies for engaging borrowers to mitigate these risks.
Product Innovation
Lenders have an opportunity to develop innovative products, such as green mortgages, which offer favourable terms for properties with high EPC ratings or resilient to climate and flood risks.
Regulatory Compliance and Reporting
Regulatory frameworks are increasingly focusing on climate-related disclosures and sustainability. Mortgage providers must ensure compliance and increasingly need to report and measure how they incorporate climate and flood risk metrics into their decision-making processes.
In summary InCol Intelligence© addresses the needs of different stakeholders and can be adapted to handle specific needs. The platform:
- Provides the Board and senior management with an accurate, meaningful, and relevant overview of its business.
- Allows the risk management team to focus on the individual cases requiring remediation.
- Is ideal for the lifecycle management of securitisations or portfolio sales.
- Can produce BOE/ECB/ESMA or other regulatory reports at the touch of a button.
Testimonies and Partners
