One consistent theme across the financial sector is that Finance, Treasury, and Risk teams often operate with completely disconnected assumptions and forecasting models. This fragmentation makes it highly complex to consistently justify Net Interest Margin (NIM) movements to investors, align FP&A forecasts with Treasury views, and run fast "what-if" scenarios across the balance sheet. 

Most traditional FP&A platforms excel at budgeting but fail to show how the balance sheet actually behaves under changing market conditions, leaving firms dependent on separate, spreadsheet-based models.

The Traditional Role of IRRBB: Duplicated and Fragmented Components 

As highlighted in Alquid's technical report, "260526 - How do we break the silos (1).pdf", critical functions and data points are heavily duplicated across traditional banking architectures:

• Risk: Manages behavioral and regulatory models (EVE/NII shocks) in a silo, setting limits without full visibility into commercial steering or client behavior.  

• Treasury: Executes structural hedges based on high-level sensitivities, leaving them blind to residual IRRBB risk left in the business lines.  

• Finance: Focuses on the budget and the accounting NIM, using commercial volume and pricing assumptions that rarely match official IRRBB policies.  

• Lines of Business: Frequently left out of the loop, executing product pricing decisions without clear transparency regarding actual liquidity and risk transfer costs (FTP).  This siloed framework significantly increases the total cost of ownership (TCO) due to duplicated ETL pipelines, cash flow engines, and modeling tools.

Moving Toward an IRRBB 2.0 Operating Model: The Alquid Approach 

Alquid bridges this historical gap by combining FP&A, Treasury, ALM, FTP, liquidity, and balance sheet forecasting within a single cash flow-driven framework.

By unifying data, calculation engines, and assumptions, Alquid enables institutions to transform balance sheet management through four key capabilities:

• Unified FTP & P&L Steering: Integrates transactional data directly at the deal level. The FTP engine transfers risk transparently to the Treasury funding center, establishing accurate accruals and allowing granular profitability analysis by product or customer.  

• Integrated Projections: Ensures that the contractual balance sheet (Back Book) and new business growth assumptions share the exact same dataset, contractual attributes, and run-off profiles, keeping FP&A and ALM perfectly in sync. 

• On-Demand "What-if" Stress Testing: Unifies macroeconomic, interest rate, and credit shocks under a single framework. ALCO can run fast, iterative simulations and get accurate answers regarding hedge impacts or deposit pricing changes in hours, not weeks.  

• ESG Integration: Moves beyond simple financial averages to disaggregate the balance sheet along climate-relevant dimensions (such as EPC ratings or transition alignment). This allows institutions to measure Net Zero targets across projections and build sustainability incentives directly into the FTP framework.

One Engine, One Truth

Breaking silos establishes a unified operational language. With Alquid, Finance, Treasury, and Risk share the exact same game plan, enabling fully integrated balance sheet and P&L scenarios, aligned planning assumptions, and total transparency into margin dynamics.  

Ready to eliminate parallel spreadsheet models? We invite you to download the technical presentation to explore the blueprint of an IRRBB 2.0 target operating model.