5 reasons not toprocrastinate on

reforming enterprise risk management

With the deadline for the fundamental review of the trading book (FRTB) implementation looming, only 15 percent of banks say they are ready to roll out an enterprise risk management system, according to the Chartis 2016 Global Survey Results. However, completing such an overhaul takes a significant investment, from meeting capital requirements to addressing infrastructure challenges in the way of reporting, testing and tracking. How can banks be prproactive about establishing a solid, efficient risk framework? Here are five reasons not to delay the process.

Only 15 percent of banks say they are ready

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Think of infrastructure reforms as a Maslow’s hierarchy of critical dependencies. Banks need higher quality data to feed the more sophisticated risk analytics that will be aggregated into reporting for more actionable insights. To extract actionable insights, such reporting requires a quality user experience.

For data sets to be accurate, you need to have order.

1.

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Many banks still remain in the planning and impact assessment phase and should rapidly be moving into the implementation phase if they hope to comply before the deadline.

Regulatory compliance takes time.

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2.

Bigger banks are struggling with directing sufficient resources to handle their sheer volumes of data, smaller banks with less data are still starved for assigning resources on projects that will yield the biggest ROI. Only 15 percent of the 100 banks surveyed by Chartis say they are ready to launch a revised risk framework ahead of the deadline.

Regardless of size, banks face similar challenges.

3.

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Deliver insights on-demand to business users across the front office, middle office and strategic planning. For banks to succeed, many departments should be aligned on implementing an efficient infrastructure that meets both business needs and regulatory requirements.

Use all your players.

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4.

The regulatory deadline poses an opportunity to rethink and implement a new infrastructure for risk data and analytics. Transforming the technological foundations of risk analytics takes ongoing investments in time and capital.

Be prepared for the long term.

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5.

Read the Chartis 2016 Global Survey for insights from your banking peers into successful implementation of FRTB.

Learn here how IBM can help your bank meet and overcome FRTB challenges.

ibm.co/ChartisFRTB

ibm.co/tradingbook

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