Business analytics vendor SAS has teamed up with human resources outfit Coalition to launch a new software product that enables financial services organisations to better align employee remuneration to the firms appetite for risk.
The Rapid Risk Profiling package is designed to tackle popular political and regulatory concerns on the banking industry bonus culture and potential misalignment of staff remuneration with corporate and shareholder interests
The software creates a direct correlation between the remuneration of each staff member and the financial risks associated to their activity, especially maturity, as recorded on the company's risk systems. It enables firms to profile those people across the organisation who are responsible for taking or managing risk and creates a visible display that links them directly with the risks that they are taking, the methods they are using and the remuneration they are receiving.
Ian Manocha, managing director of SAS UK, states: "The current credit crisis is partly a result of irresponsible lending and borrowing and remuneration structures that rewarded extreme risk taking. What SAS is looking to provide is a connection between how much of a bonus is paid to individuals, based on how much risk they are having to manage, but also, this has to be in line with the level of risk the company is prepared to take on; discouraging the extreme risk taking that we've become accustomed to and behaviour that has led to our current economic situation."
The product combines SAS' Enterprise Risk Management software and Coalition's DNA staff profiling platform. Manocha says it will provide companies with a deeper understanding of what type of risk they are facing, where this risk lies, how credible their risk evaluations are and who is responsible for that risk.
The product gets its first public outing today at Finextra's Risk & Transaction Management
event at the Brewery in London.