Celent Studies Risk Management in China

Competition from within the industry and a more complex financial environment now outweigh regulatory factors as key considerations for risk management at large financial institutions in China, according to a survey by analyst firm Celent and sponsored by SunGard.

Based on interviews with risk managers from large Chinese banks, securities firms and asset management companies, the survey revealed that only 11 percent of large financial institutions believed that their existing systems could meet their risk management needs. Operational risk (38%) and market risk (30%) were the areas of greatest focus and investment for financial institutions.

Although banks are well capitalized, deregulation and increased exposure to global market forces are driving risk management upgrades. Asset managers revealed risk management capabilities that were highly varied, and would need integrated, multi-asset portfolio technologies to cope with investor sophistication and a broad range of financial products.

"In order to compete effectively on the global stage -- and against both foreign and domestic competitors in China -- financial institutions need to enhance their risk management capabilities by improving their enterprise-wide analysis of risk management data, improve their technology, build on new frameworks such as Basel III and improve their business processes," says Neil Katkov, Celent senior VP for Asia.