Q&A: Enterprise-wide Risk Management Part IV

Waters gathered together four capital markets sources ─ two representing end-user firms, ANZ and AIA Group ─ and two sponsors ─ Thomson Reuters and GFT ─ to discuss the challenges facing capital markets firms when it comes to designing and implementing enterprise wide-risk management systems. Here are their thoughts...

Click on the relevant links to view Part I, Part II and Part III of this four-part Q&A.

Q: How can technology providers assist capital markets firms with their enterprise-wide risk management calculations?

Marion Leslie, managing director of Thomson Reuters' pricing and reference services business:
Technology providers are key to the provision of high-performing infrastructures that enable the sharing of data across the enterprise as well as the ingestion, storage, tracking and governance of data usage. Enabling the replacement of legacy infrastructures with technologies that are designed for enterprise content use will increase the returns of investment in data assets.
As data vendors, we seek to ensure that our content reflects the evolving market and regulatory needs, and we are in step with the changing way in which our customers want to access, use and benefit from our content. We have enterprise-wide agreements that serve the global nature of our customers' businesses, and which seek to help firms reduce wastage by improving efficiency and reducing costs. We continuously work to ensure that the content matches the needs of the organization's multiple use-cases: We are in constant contact with our customers, the market, regulators, experts, industry bodies and working groups, ensuring our products and services meet the current market needs and evolve accordingly to serve front-, middle- and back-office needs.

Drew Wade, senior managing partner, AIA Group:
The most prevalent risk management calculations tools are SAS, SPSS and STAT. These technologies help capture and evaluate the impacts and potential of identified enterprise risks. They define, communicate, track and monitor risk appetite and tolerance levels within the organization. They also assign ownership for executing ongoing risk monitoring and internal control activities, in addition to measuring the effectiveness of risk management activities at all levels of the organization, departments, operations, functions, asset classes and capital allocations. These tools make it easier to establish accountability for those responsible for managing risk, while ensuring regulatory and compliance requirements, as well as contractual obligations and commitments, are met.

Today's technology marketplace offers solutions that dramatically accelerate processing time and greater precision in extremely complex portfolio valuations for even the most intricate risk calculations - Vijay Aviur, head of risk, global markets and wholesale lending technology for ANZ.

Ami Grewal, head of business consulting, GFT:
The key is to focus on realistic deliverables. If you, as a technology provider, say yes to everything, it may sound like a selling point, but it assumes that clients know what they need, and that's often a bad, bad assumption. By saying no to clients, they have to stop and think about what they really need, rather than just throwing bodies at problems. It's all good and well to spend money, but if at the end of spending that money you don't have something that you can actually use, you'll be unhappy, we'll be unhappy, and the regulators are most definitely going to be unhappy. Instead, vendors need to focus on providing valuable deliverables with tangible benefits to the client and the regulator.

Vijay Aviur, head of risk, global markets and wholesale lending technology for ANZ:
Leveraging the potential of technology solutions available in today's marketplace would certainly help drive a successful EWRM implementation. Today's technology marketplace offers solutions that dramatically accelerate processing time and greater precision in extremely complex portfolio valuations for even the most intricate risk calculations. This includes a high-performance analytics infrastructure that delivers risk calculation results dramatically faster; grid computing capabilities that process jobs in a shared, centrally managed pool; multithreading techniques that enable parallel execution of multiple complex tasks; a self-service business-intelligence environment that lets stakeholders interact directly with the information they need; easy-to-use visualization tools that provide the ability to visually explore risk data on demand and always up-to-date portfolio views of aggregated risk; and cloud-based solutions that offer robust yet economical alternatives to in-house developed platforms.