This publication has been discontinued on July 19, 2011.
Introduction
Abstract
Overview
Introduction
This report provides detailed analysis into vendors specializing in a specific
product/solution. Positioning analysis and a detailed product assessment
sentiment, impact and technology are covered.
Scope
Discussion of the impact of the sub prime crisis on risk management
practices and solutions.
Looks at the rate of technological change that is being driven by
regulatory compliance measures
Highlights
The sub prime crisis has caused a fresh look to be taken at credit risk
policies and practises. Organisations are revaluating the impact of a series
of regulatory changes and endeavouring to leverage investment to enable a
truly enterprise wide approach to risk management. The discipline of
operational risk is beginning to mature.
Reasons to Purchase
Gain insights into current risk management trends and practices.
Assisting vendors in their go to market strategy
Table of Contents
Overview
Catalyst
Summary
Methodology
Executive Summary
Introduction
The Evolution of Enterprise Risk Management (Market Focus)
Enterprise Risk Management objectives and imperatives(Strategy Focus)
Technology strategies in Enterprise Risk Management (Technology Focus)
Key enterprise risk management investment areas (Databook)
IT spending opportunities in retail banking and financial markets
(Databook)
Table of Contents
Table of figures
Table of tables
The Evolution of Enterprise Risk Management (Market Focus)
Summary
Analysis
Introduction
Credit risk failures can precipitate liquidity risk, so model
assumptions need to be dynamic
Sub-prime crisis background
Credit risk challenges: leverage and modeling
Credit risk challenges: ratings agencies
Credit risk challenges: aggregation and integration
Credit risk challenges: knock-on effects
Implications for credit risk assessment and pricing
Changes to ratings agency policy and practice
Modeling
Over-reliance on modeling and silo structures prevented the successful
aggregation of portfolio risk profiles.
Modeling shortfalls
Liquidity risk
While credit and market risk have long driven investment, operational
risk is still evolving
ORM process
Communication is key.
The growing convergence between IT and risk is being driven by
regulatory change
Compliance as opportunity.
MiFID and RegNMS update
Conclusion
Enterprise Risk Management objectives and imperatives(Strategy Focus)
Summary
Analysis
Introduction
Information risk management is the foundation of successful operational
risk frameworks.
Fraud/AML detection and prevention an important entry point to ORM
Risk based product pricing must reflect all risks to ensure the most
efficient use of capital.
Risk based asset pricing.
Efficient cost of capital: economic capital modeling
Performance management
Operational risk management (ORM) is maturing from historically tactical
solutions
Considerations in establishing an ORM framework
Operational risk loss databases.
Conclusion
Bank IT strategies in Enterprise Risk Management (Technology Focus)
Summary
Analysis
Introduction
Successful solutions will be those able to deliver the right metrics to
the right people in the right time.
Automation opportunities continue to be found in credit risk
Automation and its limited role in operational risk to date
Flexibility is the key feature of operational risk solutions
Industrializing computing scale by grid computing
In operational risk, outsourcing opportunities at this point are limited.
Outsourcing of regulatory compliance can bring benefits but strict
governance is required
External loss databases
Vendor opportunity exists in flexible, customizable solutions
Need for economic capital efficiency is driving development in
calculation engines and loss data utilization.
Economic capital will be at the heart of overall risk management
strategy in financial services
Operational risk capital calculation methodologies are being refined
Process review key to ongoing refinement
Vendor opportunities
Conclusion
Key enterprise risk management investment areas (Databook)
Introduction
Risk spending is expected to remain largely unaffected due to
operational and credit risk drivers.
Operational risk will continue to grow at a faster pace in the search
for performance based efficiencies
IT spending opportunities in retail banking and financial markets
(Databook)
Introduction
Credit risk spending will lift in 2009 as further integration within
enterprise risk becomes possible.
Firms will seek to leverage prior investment internally in the drive to
find efficiencies.
APPENDIX
Definitions
Extended methodology
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer
List of Tables
Table 1: Risk management technology expenditure by region
Table 2: Risk management technology expenditure by risk type
Table 3: Risk management technology expenditure by sector
Table 4: Risk management technology expenditure by source
List of Figures
Figure 1: Enterprise risk management map
Figure 2: The levels of ORM
Figure 3: Investment drivers
Figure 4: Barriers to integration
Figure 5: Types of capital
Figure 6: Risk based performance measurement
Figure 7: Meeting Basel II AMA requirements
Figure 8: Scenario analysis a powerful tool for ERM implementation
Figure 9: Reporting and compliance is driving investment
Figure 10: Encouragingly upgrading of risk frameworks is already
underway
Figure 11: Complexity of data types means progress in operational risk
will be evolutionary
Figure 12: The many impacts of economic capital
Figure 13: Risk management technology expenditure by region
Figure 14: Risk management technology expenditure by risk type
Figure 15: Risk management technology expenditure by sector
