RISK MANAGEMENT FOR FINANCIAL INSTITUTIONS COMPLIANCE, STRESS TESTING AND RISK ANALYTICS
RC: Could you provide a broad overview of how financial institutions (FIs) are tailoring their risk management and operational improvement operating models to reflect the current business landscape? What, in your opinion, are the most significant risks permeating this space?
Rawal: FIs have been focused on integrating the various elements that impact how they manage the business into a more cohesive framework, leveraging off the ability to meet both internal demands as well as external demands. This has required a detailed appraisal of existing infrastructure and processes as well as an assessment of how the firm can leverage new technologies. In order to meet the needs of the current business environment, which can be characterised as a competitive landscape with significant headwinds for FIs to deal with, including regulatory pressure, declining margins and competitive threats, firms have been evaluating how to develop the optimal operating model to address all of these issues. The most significant risks to accomplishing this include lack of a data maintenance and validation strategy, poor strategic resource planning and inadequate infrastructure.
Jan-Mar 2017 Issue