BRG Launches AI-Based Index to Provide Quarterly Forecast of Bank Health
Berkeley Research Group (BRG) announced the launch of its Bank Health Index (BHI), which provides an ongoing method to identify issues in the banking sector at an individual bank level. The BHI is based on a machine-learning model developed jointly by BRG’s artificial intelligence (AI) and banking teams. It uses a variety of data points, including publicly available data since 2000, to provide a quarterly forecast of the health of financial institutions over the next six months. The subscription-based index provides access to not only leading-edge analytic results but also BRG’s banking experts, who leverage their deep experience to provide valuable context to the results. The BHI will be updated on a quarterly basis with additional data and insights from the sector.
“In developing the BHI, we considered various factors that drive bank health. We use historical data of failed banks and banks that have been acquired to inform our analysis,” said Managing Director Joe Sergienko. “We take the different elements of the call reporting, find relationships that impact bank health and predict the potential for failure and future potential of being acquired.”
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For regulators, investors and private equity firms, and law firms, the BHI provides important clarity, synthesizing vast amounts of data to identify banks that may be experiencing difficulty or underperforming based on historical data with BRG’s leading banking expertise.
“The BHI allows regulators to use a much broader dataset across all banks to risk-rate and focus their supervisory efforts,” said Managing Director David Abshier. “For legal teams conducting due diligence on behalf of their clients, the BHI broadens the analysis and allows comparisons across other banks. The index also helps cut through the noise that makes the assessment of a quality investment a difficult prospect.”
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The index combines the expertise of BRG’s AI practice, composed of data scientists, data management specialists and senior leaders who have decades of experience working with dispute and compliance technologies, with BRG’s banking team, whose professionals have deep experience advising regulated financial institutions, investors and their attorneys on issues including regulatory and risk management matters, financial services industry practices, financial strategies and litigation challenges.
“BRG is a deeply data-driven organization,” said Managing Director Craig Freeman. “By combining our advanced AI capabilities with our extensive sector experience, we offer clients unique insights that matter.”
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