Crystal Ball Industry Examples

Banking and Finance

To ignore the effects of uncertainty in your financial and business analyses means to potentially expose your organisation to unnecessary risk and potential failure.

 

Banking and Finance GraphThis is exactly what people do when they use Microsoft Excel without Crystal Ball for financial and business analyses.
 
In traditional financial spreadsheets, you are forced to rely on best-guess or average values even when you know that inputs such as market size, units sold and royalty rate are uncertain and uncontrollable.
 
Whether you're creating a business case, calculating NPV, assessing credit risk, determining bank capital adequacy, valuing assets, or forecasting financial returns, you need to account for the uncertainty in your models. Your knowledge and Crystal Ball will make the difference between whether your work succeeds or fails.
 
With Crystal Ball you transform your Excel spreadsheets to get a credible picture of risk, create accurate predictive models, search for the best solution and maximise appreciation of the risks that you are facing.
 
A complimentary product to Crystal Ball is ModelRisk for Insurance and Finance. ModelRisk for Insurance and Finance is a quantitative risk analysis tool specifically designed for the insurance and finance industries that allows the user to incorporate advanced techniques in actuarial and financial risk analysis into Excel models.
 
With little effort, you can apply these advanced analytical techniques to your new or existing spreadsheets to create more accurate cost and financial predictions and better informed business decisions.

 

With Crystal Ball tools, you can:

  • Mitigate risk in ROI and NPV calculations

  • Gain immediate insight on the spreadsheet model inputs that most drive value

  • Make knowledgeable decisions on where to focus resources

  • Replace min/max estimates with more accurate range of all possible outcomes

  • Provide decision-makers with factual data that shows the risk associated with each choice

  • Improve decision time and reduce the costs of resources,

  • Consider multiple aspects of problem such as constraints, goals, and requirements,

  • Replace costly “what if” iterations with automated procedures,

  • Optimise processes, products, or portfolios,

  • Perform efficient asset allocation given budgetary constraints and other requirements
     

Key features of interest to your industry include sensitivity analysis, historical data fitting, correlation, efficient frontier and optimisation.

  • The sensitivity analysis helps you to understand which of the uncertain input variables are most critical and drive the uncertainty of your cost model.
  • If historical data does exist, the data fitting feature will compare the data to the distribution algorithms and calculate the best possible fit and parameters for your data.
  • Correlation lets you link uncertain inputs and account for their positive or negative dependencies.
  • Optimisation helps determine optimal decision choices to maximise or minimise your goals (e.g., maximise the return on a portfolio of assets).
  • Efficient frontier runs multiple optimisations to determine the best balance of risk and reward for a particular problem or portfolio. 
  • Optimisation also allows you to account for uncertainty and risk in simulations but still select the best possible settings (e.g., staffing levels, investment amounts, product prices) to achieve success.