Financial Services Solutions

Operational Risk Management

There are a multitude of business reasons beyond regulatory concerns to adopt more sophisticated methods of measuring and managing risk in the financial services industry. Despite regulatory pressure, bank managers and directors are not implementing risk management processes merely to satisfy regulators. Instead, they are doing it because it makes good business sense.

When implemented effectively, operational risk management will transcend traditional audit and control processes and shift resources from bank compliance and crisis management to strategic planning, capital management, and enhancing shareholder value. Indeed, the best measure of risk versus reward is risk-adjusted return on capital.

Financial risk management in retail banking requires identifying the sources of risk, measuring risks and forming plans to address them ― a crucial exercise, but one that is rendereed almost pointless without consistent , consolidated, up-to-date data.

The retail banking sector is also, of course, one of the most competitive in the financial services industry, meaning there is little margin for error in assessing operational risk when it comes to managing loans, cash balances, credit, liquidity and other risks.

For financial institutions this creates the challenge of collecting, managing and reporting on operational risk events, a task which can be accomplished by tracking and monitoring Key Risk Indicators. Then after compiling this data, the greater challenge to a retail banking operation is analyzing and reporting risk assessments to identify priorities.

Solution Description

Many banks have turned to Panorama’s powerful NovaView 5.0 business intelligence (BI) solution. Advanced BI capabilities transform data into risk information financial institutions can act on and avoid risk arbitrage ― the fallout from using processes and technologies where the risk is not measured effectively. With a powerful and flexible BI platform like NovaView 5.0, everyone from CEOs to a line managers can access real-time information that provides a complete picture of exposures. That way, when the organization enters a deal everyone knows what its limits are and there are no surprises.

In retail banking, BI can also improve efficiency and reduce costs by having one reporting and analysis platform for all credit, market, and operational risk information. And an additional benefit is improving productivity by empowering risk professionals to do more of their own analysis without recourse to IT.

Cedacri

Cedacri is a leading IT provider for financial institutions in Italy. With a turnover of €134.9 million in 2002, 552 employees and a clientele of 66 banks, Cedacri is a market leader in IT services.
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