RiskTech Forum

SunGard: BCBS239 – The $8 Billion Game Changer For Financial Institutions

Posted: 10 November 2014

The IT landscape of financial institutions is on the brink of fundamental change on a global scale. As executive managing boards around the world act on the strategic initiatives imposed by the Basel Committee on Banking Supervision’s latest principles for effective data aggregation and risk reporting (BCBS 239), the broader context of this regulation is becoming clear. Financial services decisionmakers are beginning to understand that BCBS 239 will require high levels of investment – particularly in IT.

The impact of the regulation on IT introduces a significant challenge for financial institutions. While a new IT architecture is not a silver bullet per se, it should be seen as the crucial enabler of BCBS 239. Most of today’s institutions will see the value in what this author terms “Tiki-Taka risk management” (Ludwig, Can “Tiki-Taka” Tactics Keep Risk Management on the Ball? 2014), a paradigm that sees the financial institution as a whole steered in line with its targets, objectives and risk appetite with more accurate care. Investment in BCBS 239 will not only drive the adoption of this approach but also the unification of the three pillars of risk, finance and regulatory reporting through new technology.

In other words, the regulation can be seen as game changing for the financial services industry. In this context in-memory technologies, such as those developed by SunGard can address the two main priorities for financial services IT: speed and flexibility.

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