Fintech
FIS and PwC Climate Tech transform risk reporting
Global FISone of the largest financial technology companies in the world, announced the launch of its Climate Risk Financial Modeler.
Powered by data from PwCas part of a collaboration, the modeler is designed to help companies better assess, reduce and report exposure and provide more proactive prediction of climate-related risks.
This offering comes at a time when global companies are facing enormous pressure to expand their business and financial strategies with climate considerations. As companies around the world continue to leverage disruptive technologies such as artificial intelligence (AI), FIS and PwC hope the technology can be instrumental in assessing and predicting climate risks for businesses.
Reporting requirements to help mitigate climate change risks
Climate change and its consequences will continue to cause a global impact, with the World Economic Forum suggesting it is expected to cause damages of between $1.7 and $3.1 trillion per year. This includes significant areas such as infrastructure, property, agriculture and human health.
As a result, companies across a wide range of industries are expected to feel the brunt of the impact. Regulators are now looking to increase climate-related reporting and stress testing requirements to better mitigate these effects.
In the financial space, fintechs in particular are starting to focus on sustainability as a business necessity, not only to meet regulations, but also to remain competitive.
FIS’s Climate Risk Financial Modeler is designed to harmonize client data with third-party climate data. FIS says it will be hosted on a new interface that is directly tailored to the risk management needs of financial institutions, in a bid to promote more proactive forecasting of climate-related risks.
“The launch of the FIS Climate Risk Financial Modeler is the latest chapter in our long history of providing market-leading software and services for managing risk across the lifecycle of money,” says JP James, Head of Treasury and Risk at FIS. “Corporate climate risk and related regulatory pressures are becoming increasingly important to executives and risk managers at all levels and across all industries.”
Enabling businesses to promote greater sustainability
With this launch FIS is also developing its insurance risk application capabilities to meet client challenges, particularly when it comes to understanding how climate change may impact a business. Users can and will perform modeling both locally and globally predict potential financial losses from severe weather events and determine the effects of climate change on their operations.
Likewise, FIS clients will also be able to obtain a more meaningful assessment of their operations, investments and strategic positioning from a climate risk perspective, in addition to support from their climate-related regulatory compliance.
The solution leverages powerful data from PwC US, combined with readily available information about a company’s physical assets – such as its buildings and contents – along with global climate data. It then performs the relevant calculations.
“PwC’s Climate Risk Modeling Services team prides itself on helping companies make informed, predictive decisions about growing climate risks,” emphasizes Richard de Haan, global risk modeling services leader at PwC US. “By providing a dataset that supports FIS’s Climate Risk Financial Modeler, our team is helping companies of all sizes and across all sectors shore up their operations against extreme weather events, address climate reporting requirements and to promote efficiency and sustainability”.
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