In 2025, Asset and Liability Management (ALM) has evolved from a background function to a main component of strategic decision-making in banks. The volatility of interest rate cycles, increased liquidity risks, and macroeconomic shocks require banks to leverage ALM as a crucial defense mechanism and strategic guide. The integration of solutions like Wolters Kluwer's OneSumX for ALM facilitates this transformation, providing essential functionality such as real-time analytics and regulatory compliance. Regulatory frameworks, particularly Basel IV, demand that banks optimize asset-liability profiles while considering a comprehensive view of risk encompassing capital, liquidity, interest rates, and climate impacts.
In 2025, Asset and Liability Management (ALM) has become a core pillar of strategic decision-making in banks, balancing profitability, liquidity, and risk.
Interest Rate Risk in the Banking Book (IRRBB) has re-emerged as a top concern, demanding dynamic simulation models and strategic balance sheet steering.
Liquidity risk has become more nuanced with evolving Basel IV requirements, as well as increasing scrutiny of contingent liquidity plans.
Banks must adopt a holistic view of risk across capital, liquidity, interest rate, and ESG domains in a more interconnected regulatory landscape.
#asset-and-liability-management #banking-strategy #liquidity-risk #regulatory-compliance #financial-stability
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