Turkish Economy Bank Case Study on FINCAD Implementation

This case study details the implementation of FINCAD at Turkish Economy Bank (TEB) for optimizing pricing and asset-liability management (ALM). TEB faced challenges in calculating options prices and cash flows on inflation index bonds due to the limitations of their existing risk management solution. The bank sought a new solution capable of pricing complex instruments, such as options caps/floors and cross currency swaps. FINCAD was recommended and subsequently adopted, allowing TEB to effectively calculate expected inflation rates, cash flows, and risk sensitivities for various financial products. The implementation was rapid, with over 25% of products operational within three months. TEB now utilizes FINCAD daily for pricing approximately 3,000 FX and interest rate instruments, ensuring compliance with regulatory reporting requirements, including Basel III. Looking ahead, TEB anticipates that the flexibility of FINCAD will support their adaptation to future market and regulatory changes.