19 August 2017
Gaurav Handa

Rewiring Bank IT

Gaurav Handa - Oracle Financial Services

11Posts 49,681Views 0Comments

Aligning Risk and Finance, Enough Said Already?

19 April 2011  |  3247 views  |  0

With black swan events on the rise, how are financial institutions responding?

Stress tests conducted by regulators on both sides of the pond have now moved from a onetime exercise to de rigueur events.  Earthquakes in Asia, civil unrest in Middle East & North Africa, and greater economic uncertainty in the EU might not have been factored into the underlying scenarios, but are definitely giving banks around the globe reason for navel gazing as far as their risk reporting systems are concerned.

The post-crisis CRO has had to adapt to shifts in the risk landscape that include new financial regulations (as a result of Dodd-Frank in the US), new global capital adequacy, stress testing and liquidity risk monitoring requirements (Basel III), and the adoption of standards defined in IFRS. While many of the new regulations stem from a desire to ensure long-term solvency of financial institutions, the guidance, especially from the EU and BIS, tacitly assumes immutable risk-type taxonomy and an orderly marketplace with sufficient liquidity.

How do banks get there, and what’s stopping them for mastering the business intelligence needed in today’s economic and regulatory climate?

New research from IDC reveals numerous hurdles – from complexity in underlying data architectures following years of M&A, to the complexity of the financial instruments themselves.

Even more pervasive, however, is a fundamental lack of alignment between risk and finance departments, which has become essential to not just respond to various stakeholders but also ensure a more solvent and profitable organization going forward.

Closer alignment between the risk and finance function is the starting point for success in today’s transformed risk paradigm.  From there, financial institutions can move forward confidently in creating an integrated risk and finance decisioning platform that is "compliance centric" – an environment in which business processes, analytic data models, application functions, and policies are all designed with accounting, regulation, and risk requirements built in at the transaction level.  This approach will ensure that instead of just solving problems of the past, financial institutions are on a sustainable path to profitability through the current environment of increased uncertainty and greater regulation.

TagsRisk & regulation

Comments: (0)

Comment on this story (membership required)

Latest posts from Gaurav

A New Look at Liquidity Risk: Best Practices Part 2

24 April 2012  |  2811 views  |  0 comments | recomends Recommends 0 TagsRisk & regulation

A New Look at Liquidity Risk: Best Practices Part 1

22 March 2012  |  5819 views  |  0 comments | recomends Recommends 0 TagsRisk & regulation

Setting the FS Growth Agenda: World Population hits 7B

07 November 2011  |  4194 views  |  0 comments | recomends Recommends 0

Getting a Grip on Big Data in Financial Services

20 September 2011  |  4868 views  |  0 comments | recomends Recommends 0 TagsRisk & regulation

Road to Basel III: Australia Preps for Life in the Fast Lane

15 September 2011  |  5769 views  |  0 comments | recomends Recommends 0

Gaurav's profile

job title Director Marketing
location Redwood Shores
member since 2011
Summary profile See full profile »
A 15 year-analytics and business intelligence technology veteran, Gaurav Handa is currently Director, Marketing at Oracle Financial Services. As part of Oracle's Financial Services Global Business Un...

Gaurav's expertise

Member since 2011
11 posts0 comments
What Gaurav reads
Gaurav writes about
Risk & regulation
Gaurav's blog archive
2012 (2)2011 (9)

Who's commenting on Gaurav's posts