Integrated Risk Management Creates Order in the “Data Jungle”
By Hans Huesch, Program Manager, Wolters Kluwer Financial Services
When obtaining a deep insight in to the bank, it is important to have a clear view of the data within all systems – however, this can often turn into a case of “Chinese whispers”. Due to the complexity of the business, most institutions find it difficult get one correct set of data from one uniform data source, as they have to maintain a system consisting of several IT infrastructures operating in silos. Consequently much can be lost in the collection and reporting of data.
At the same time the complexity and effort associated with new regulatory reporting and risk management requirements is steadily increasing. For example, the onset of Basel III is setting off an avalanche of data, results, reports and documentation which will need to be managed by firms around the world. On top of this comes an intensified level of detail as well as increased frequency and volume of data that needs to be disclosed, thus multiplying the need for resources within institutions who are dedicated to analyzing and processing the necessary information.
This gives rise to a number of new challenges which have to be mastered. For example, a growing operational risk for banks arises as a result of potential difficulties in coping with the amounts of data in the prescribed time intervals as well as incorrect processing.
The requirements for manpower – particularly from risk controllers, regulatory reporting managers, and compliance officers – have already been rising significantly for several years. As the January 2013 deadline for the statutory implementation of Basel III approaches, institutions are now coming under pressure to adjust their internal IT architecture and information management processes to the existing challenges of financial and risk reporting.(more...)