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• Changing Risk Management
• Our Response

Recent market events, major corporate failures, increased volatilities and evolving regulatory demands have highlighted the deficiencies in many of the current approaches to risk management and the technology solutions used to measure and control risk.

While financial institutions have taken steps to measure risk in an effort to satisfy client and regulatory requirements and avoid losses, their efforts have been focused primarily in silos, computing market and credit risk separately, managing different asset classes separately for varying portfolios and business lines. This approach, however, does not capture the interaction of the different types of risk that a firm faces, across either the whole firm or within a client's portfolio or certain asset class for example. Furthermore, it is generally difficult to reconcile and compare numbers or results coming from disparate solutions.

There is a need to measure and manage all types of risks up to and including the enterprise-wide level.   Only by accurate measurement of the different risks and calculating the optimal risk and reward trade-off across the enterprise, can an institution maximise client or shareholder value whilst mitigating and ultimately reduce the risk associated with increasing that value or return.

Financial institutions also face an increasing number of other business, operational and regulatory challenges:

• Increasing volumes of plain vanilla products and the increasing volume and complexity of high margin structured products - risk management is a brake on business
• Increasing competition and speed of product development drives the need for quicker risk control approvals - time to market
• The increasing penetration of eBusiness - performance demands on risk technology
• Increasing regulation - increasing administrative burden on risk managers
• Regulation is pushing financial institutions to enhance their market and credit risk measurement approaches - regulatory capital constraint and regulatory expectations
• Financial institutions are striving to increase revenues while maintaining or trying to rebuild or maintain their existing depleted capital levels - economic capital constraint
• Consistency across risk and finance for regulatory reporting and performance measurement - integrated risk and finance
• Recent and current industry consolidation - multiple disparate risk systems
• Increasing need for analytical pre-deal checking for both market and credit risk - information for decision making

Our response to the changing face of risk management is Razor, our award-winning risk management framework.  Razor assists financial institutions to meet today’s risk management and control challenges – and those of tomorrow.