Unified data and analytics – A new approach to risk management in the financial sector

Today, many organisations within the financial sector are finding themselves at a crossroads when it comes to managing their risk, finance and compliance functions. The twin pressures of increased regulatory activity and on-going economic uncertainty have created an environment where it makes sense to bring these three functions together under a single, enterprise-wide platform. Consolidating these disparate activities has the power to transform how risk is managed within banks, accelerating the rate at which compliance is reached while at the same time reducing costs. In the coming months and years, the decisions that banks make about investments in risk management systems will play a central role in the reputation, resilience and profitability of their organisations. Risk management today can offer more than financial protection; it can drive real competitive advantage.

It’s all in the data

For the majority of banks today, risk and compliance functions are siloed in a framework whereby each solution is associated with its own set of applications. This means they cannot achieve a holistic view of their organisation’s data. For many institutions this state of affairs has been allowed to continue in lieu of a credible alternative to short-term tactical fixes or wholesale rip-and-replace deployments with the associated capital expenditure. This has led to a situation where many banks have little real control of their data, and where there is no control of data, there is no control of the business. Regardless of the way you look at these issues, from business challenges to regulatory driven infrastructure initiatives, the ability to work with consistent, traceable, high-quality data that can be shared easily across multiple activities is the key to success.

For banks to benefit from superior finance and risk management, they need to put in place a clear and scalable solution; a framework that evolves with the business and accommodates existing third-party or in-house applications. This provides a long-term environment in which to manage all risk activities. Above all, it offers complete visibility and control of risk data irrespective of where this data is sourced from. This is a point that cannot be overstated. For modern financial institutions, data is the key both to compliance and risk management. Those organisations that can easily access accurate and complete data are the ones that will be able to generate the most competitive differentiation.  

The Oracle way

A leader in financial sector data management and risk analytics, Oracle offers a clear strategy  to address and replace short-term tactical and wholesale initiatives  that the industry has been waiting for, allowing banks to build a risk platform that is cost effective, yet robust enough to meet future requirements. With Oracle, banks can take an evolutionary approach to their enterprise risk management platform, with the full confidence that pressing compliance issues, such as Basel III and the Dodd-Frank Act are comprehensively addressed using Oracle’s common data model, infrastructure and business intelligence layer.

This results in a fundamental shift in perspective. Banks are able to put in place a coordinated risk platform that enables them to reach back throughout the whole information management lifecycle. Rather than building a tactical solution from the bottom up, banks  begin with the end goal and objectives in mind, which clearly outline how and where the data will be leveraged and utilised, rather than on what technology is needed to deliver it.

Importantly, this approach also ensures that banks can get as much value as possible from their data throughout every stage of the information lifecycle. Data longevity and reusability, meanwhile, is guaranteed for wherever and whenever it is required. This unified method of risk management encourages teams to seek out new business opportunities safe in the knowledge that their risk platform can adapt quickly to support their endeavours.

This approach also helps customers ensure the consistency of their risk data while improving traceability and availability across any application. Importantly, Oracle’s solutions enable customers to measure and meet risk adjusted performance objectives, while cultivating a culture of risk management throughout their organisations by increasing transparency and improving insights into customer behaviour.

The flexibility of Oracle’s  enterprise risk management  tools ensures that risk managers have on-demand insights into the risk positions of the enterprise and what factors are driving those risks. As the importance of near real-time risk information gathers pace, this ability is more critical than ever. Today, complex liquidity scenario analysis and stress testing often needs to take place in real-time. In short, Oracle supports banks in their drive to meet growing regulatory demands for timely and reliable information.