RiskTech Forum

Do more with less

Posted: 19 October 2012  |  Author: Shane Murray, Chartis Research

While financial institutions face considerable challenges to deal with new regulations and to overhaul their risk management practices, they do so at a time when profitability and ROE remains low. As a result, many firms are either holding their risk technology funding steady, or are even be reducing their risk function and technology budgets.

Considering the major steps that need to be taken by financial institutions just to continue to run the bank, risk functions will need to start doing more with less. With regulatory compliance becoming increasingly burdensome and taking up more and more time and resources, risk functions will need to use fewer resources to handle other tasks, such as actively managing the firm’s risk profile. To be able to complete more compliance tasks, existing business activities, and to manage long-term changes to the risk function, risk functions will need to become more efficient.

Improved technology systems will be a key enabler for more efficient risk management. Improved data management, in particular, can help reduce the time spent gathering and validating data, leaving more time available for risk analysis and management. Enhanced, real-time risk analytics and stress testing will also help firms to complete more tasks in a shorter time, which will be vital as the workload increases across a range of areas.