JLL Risk Analytics addresses the challenges faced in identifying and monitoring risk within property portfolios. It’s proprietary technology, powered by artificial intelligence and machine learning, provides automated valuation modelling, environmental social governance (ESG) risk metrics, market momentum and liquidity analysis. This comprehensive approach helps assess critical factors such as market performance, pricing and sustainability, enabling clients to quantify the impact of these risks on asset values.

Its suite of Risk Analytics technology applications captures millions of data points from 300+ proprietary owned and third-party data sources and key markets worldwide. This empowers JLL’s global clients to identify and monitor real estate risk, predict value shifts, and capitalise on new investment opportunities.

JLL’s international banking client had several goals in mind when searching for a solution. It wanted to address not only environmental sustainability factors and prepare for EU reporting requirements, but also monitor the risk and value of its assets to support better informed and predictable investment decisions. In this case, the bank c was able to leverage JLL’s applications to identify underperforming assets within the portfolio and address assets of potential concern. The information uncovered through the process allowed the bank to mitigate future and current risk and create a competitive advantage, whilst also meeting the reporting standards set by the ECB.

The bank was able to leverage the JLL’s applications to meet environmental reporting requirements and fill in gaps between valuations, but it gained even more than simply satisfying regulations. By using real-time analytics and automation, the bank was able to understand the portfolio better and make data-backed investment decisions.

The assessment identified 10% to 15% of the portfolio that required a further review, and as a result, the bank decided not to continue with 2% to 5% of loan refinances within the portfolio. Further, the bank also chose to reduce its exposure in two different commercial real estate sectors. Aa significant win for the bank with reduced risk exposure and improved portfolio performance delivered by the analytic insights provided. In addition, the bank will be able to leverage these updated insights when it conducts a full onsite assessment, providing more predictable investment outcomes for the bank.

By reducing risk exposure, the bank also achieved immediate operational and administrative savings. By using technology, the company saved approximately $100,000 in annual operational costs, the equivalent of a full-time employee. Of course, the assessment also ensured that the bank met climate risk and reporting standards. Overall, the bank pursued a forward-thinking and progressive solution, and it reaped the benefits.