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Adapt and Evolve in the New Regulatory Regime

According to the Office of the Comptroller of the Currency (OCC), over the coming financial year, the US supervisor will be looking ever more closely at how...

According to the Office of the Comptroller of the Currency (OCC), over the coming financial year, the US supervisor will be looking ever more closely at how banks are adapting to evolving AML and cyber security threats, whilst maintaining strong governance and oversight processes and programmes, including documented gaps and timelines to close them.  This follows similar messages and focus areas from global regulators such as the UK’s Financial Conduct Authority who earlier...

Big Data and Financial Crime and Compliance: A marriage made in heaven or one that's doomed to fail?

Big data is a trendy topic right now, not only in financial services, but across all industries.  However, it’s certainly not a new topic.  Over five years ago,...

Big data is a trendy topic right now, not only in financial services, but across all industries.  However, it’s certainly not a new topic.  Over five years ago, The Economist magazine featured an article called The Data Deluge that explained how quickly the quantity of information in the world is growing and how hard it is to store and analyze this data.  The author further explained the benefits of monitoring data (i.e. credit card companies identifying fraud) and the...

Sophisticated Pricing Strategies: One Price DOES NOT Fit All

With a persistent low growth environment, myriad of regulatory obligations and most banks running after a finite set of “good” customers, bank profitability is...

With a persistent low growth environment, myriad of regulatory obligations and most banks running after a finite set of “good” customers, bank profitability is under great pressure. One niche lever in the hands of the banker in such a challenging environment is pricing. Going by the business model in a competitive environment where a new entrant is expected to have very aggressive pricing, there is the strategy aspect for the other incumbents, who need to use price to retain...

Data Governance is about more than ticking regulatory boxes – it’s good for business

In 2013, the Bank for International Settlements wrote that many banks lack “the ability to aggregate risk exposures and identify concentrations quickly and...

In 2013, the Bank for International Settlements wrote that many banks lack “the ability to aggregate risk exposures and identify concentrations quickly and accurately at the bank group level, across business lines and between legal entities.”   Translation? Financial institutions as a whole have become so complex and the products they sell have developed at such a rapid pace that their own risk infrastructure has not kept pace. FI’s systems don’t provide a true picture of...

Find a Silver Lining to Regulatory Reporting

When it comes to regulatory reporting, financial institutions feel increasingly boxed in.  On one hand, the number, frequency, and complexity of reports...

When it comes to regulatory reporting, financial institutions feel increasingly boxed in.  On one hand, the number, frequency, and complexity of reports continues to spiral, especially for global financial institutions.  At the same time, regulators are strongly encouraging firms to spend more time on analysis and review, such as the U.S. Federal Reserve’s guidance that financial institutions spend 80% of the time allocated for regulatory reporting on analytics/reviews and...

Oracle Featured in Oliver Wyman’s Report on Vended Stress Testing Systems

Following the financial crisis, stress testing has become a central means of determining capital need for banks and the approach is here to stay. The industry’s...

Following the financial crisis, stress testing has become a central means of determining capital need for banks and the approach is here to stay. The industry’s response to this new paradigm has been a frantic development of capabilities, focused primarily on the methodological techniques that underpin robust financial projections. As highlighted in Oliver Wyman’s ‘Stress relief: Are vended systems the answer?’, stress testing will only increase in complexity and many banks...

Eliminate the Vulnerability in Model Risk Management in Banking

Just a year ago, we discussed the concept of Model Risk Management with you and how to tackle it using three lines of defense.  The overall idea of Model Risk...

Just a year ago, we discussed the concept of Model Risk Management with you and how to tackle it using three lines of defense.  The overall idea of Model Risk Management continues to grow and expand within a financial institution and we now bring you the key components for effective model risk management.  Today, many financial institutions consider model risk a subset of operational risk, as model risk mostly affects the team that creates and uses the model. There are...

A Picture of an Effective Data Governance Structure

As discussed in our first blog about the Basel Committee on Banking Supervision’s rules aimed at strengthening risk data aggregation and risk reporting...

As discussed in our first blog about the Basel Committee on Banking Supervision’s rules aimed at strengthening risk data aggregation and risk reporting practices at banks (BCBS 239), we noted that regulators now want banks to be able to provide better, cleaner data more quickly than ever before -- something many banks continue to struggle with. And further, senior management now must take direct responsibility in the capture and aggregation of risk data. To do this...

Big Banks Don’t Need Big Bangs: An Evolutionary Approach to Enterprise Stress Testing

Automating enterprise stress testing, like other complex IT undertakings, doesn’t lend itself very well to a “big bang” approach.  The implementation of any IT...

Automating enterprise stress testing, like other complex IT undertakings, doesn’t lend itself very well to a “big bang” approach.  The implementation of any IT solution to address a comprehensive regulatory mandate such as CCAR, DFAST or EBA Stress Testing all at once can be inherently risky, time consuming and very expensive. With regulators laser-focused on the governance and processes behind regulatory mandated stress testing, banks need to evaluate each major area of...