Risk Information Services Delivering value through risk and regulatory analytics

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  • 1. Risk Information ServicesDelivering value through riskand regulatory analytics
  • 2. OverviewCompanies are seeking greater transparency, deeperinsights, and more reliable predictors to manage risk,meet regulatory requirements, and gain a competitiveedge. The financial downturn and global economicturbulence has highlighted critical gaps in the wayorganizations traditionally approach business intelligenceand what’s needed to sustain a stable and growingorganization. Companies face the following challenges inmeeting these objectives:• Performance indicators do not adequately and accurately describe how the business is doing• Plans and forecasts fail to incorporate probabilities and potential internal and external threats• Unidentified exposure to achieving short, mid, and long-term strategic objectives• Insufficient information available to manage risk and meet regulatory requirements2
  • 3. Risk and regulatory analytics Traditional Business Intelligence Business Analytics Analyze Optimize Understand Predict Decision Support Action Support Standard / Canned Reports Ad hoc Reports and Dashboards Key Performance Indicators (KPIs) Key Performance Predictors (KPPs) ERP Data Management Enterprise Data Management The traditional role of business intelligence has Companies are increasingly leveraging risk and regulatory transformed from the standard analysis and reporting to analytics to: business optimization and prediction. Analytics leverages 1. Predict market trends, anticipate demand,  cutting edge technologies to boost the power of data, and react quickly to opportunities — while also making it a strategic tool for gleaning new insights, keeping an eye on their risk exposure and regulated predicting events, addressing risk and regulatory issues, business environment improving forecasts, and making informed decisions. 2.  nable decision makers to evaluate the risks and E rewards associated with strategic and operational Executives need to proactively identify and understand decisions — providing insights into the actions that their risk exposure in order to make decisions that manage have real and sustainable value and mitigate the sources of risk. Risk analytics provides 3.  stablish effective programs that address and avoid E information to navigate challenging economic conditions disruptions from expanding regulatory requirements, and complex legal and regulatory environments, with the including Dodd Frank, Sunshine Laws, Lease insight and foresight that only analytics can provide. Risk Accounting, and the Food Safety Modernization Act analytics uses a range of techniques and technologies to leverage big data to extrapolate insights, calculate likely 4.  nalyze the ever increasing volumes of structured A scenarios, and predict future events. and unstructured data that are available internally and externally to gather valuable information and actionable insights Risk Information Services Delivering value through risk and regulatory analytics 3
  • 4. A fresh approachDeloitte’s Risk Information Services takes a holistic • Integrate analytics across functional areas ofapproach to help companies integrate leading risk analytic the organizationtechniques and technologies to capture, transform, and • Facilitate compliance to industry-specific regulationsanalyze big data. As a result, companies are empoweredto meet the increasing risk and regulation challenges. We With leading technology capabilities, Risk Informationhelp organizations improve business management and Services offer highly specialized innovative solutionsmarketplace competitiveness to: that enable an enterprise-wide approach to risk and• Empower leaders to act on industry intelligence in a regulatory analytics. timely and coordinated manner • Analytics applied addresses issues: what problem• Outline applicable risk management procedures are you trying to solve? and controls • Information management provides insight: how do• Enhance forecasting and reporting mechanisms you aggregate, manage, transform, and retain data?• Provide operational, interactive dashboards for • Performance optimization adds value: monitoring Key Performance Indicators (KPIs) what’s happening now and how do we• Implement a consistent “risk intelligent” approach to improve performance? decision making • Analytic insights build action plans: how do we look to the future for a forward-thinking approach? Analytics Applied In De si fo rm t gn dic ati | Im Pre hts® on ple ze | Man Analytic Insig men Optimize | Analy agement t | Manage Per n f or m ti o a n c e O p t i m iz a Re v ort ie w | A n aly z e | R e p Analytic Insights Performance Optimization Information Management • Predictive models • Risk and regulatory analytics • Data quality • Risk measurement and dashboards • Internal audit analytics • Data governance/management • Deloitte MarketPoint • Compliance and attest analytics • Cyber risk analytics • Business performance • Business intelligence/finance analytics • Financial instrument analyticsAs used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and itssubsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.4
  • 5. Deloitte’s Risk Information Services provides risk and regulatory analytics with technology services to improve Risk Information Services analytics technologies how companies understand, define, communicate, and RIS leverages a broad array of leading technologies to manage their data assets to meet present and future deliver reliable and sustainable solutions. A sampling of business needs. these tools includes: Information management IBM SAS • Data quality: assess, measure, and improve the quality • Cognos Business • Enterprise BI Server of data for analysis Intelligence • Enterprise Miner • Data governance/management: monitor, maintain, • Cognos TM1 and FSR • Text Miner and protect data • OpenPages • DataFlux • SPSS • Financial Performance optimization • InfoSphere DataStage Management • Risk and regulatory analytics: adoption of and • ABM compliance with regulatory standards, reporting requirements, responses to regulator inquiries and Microsoft SAP managing government sponsored programs • SQL Server and Analysis • SAP BW • Internal audit analytics: monitor internal controls to Services • Treasury prevent fraud and expose risk • Sharepoint Server Management • Compliance and attest analytics: determine financial • .NET Framework • Liquidity Planner statement and regulatory reporting risk • Crystal Xcelsius • Business performance: improve performance with analytic modeling for forward-looking scenarios Oracle Others • Business intelligence/finance analytics: increase • Hyperion Strategic • Tableau operational productivity and process efficiency Finance • TIBCO Spotfire • Financial instrument analytics: access and analyze • Hyperion Crystal Ball • Qlikview quantitative modeling of financial instruments • Financial Close and Disclosure Analytic insights Management • Predictive models: leverage big data to model outcomes about current conditions and future trends • Risk measurement and dashboards: evaluate risk with metrics and visualizations • Deloitte MarketPoint: gain market insight via analysis of methodologies that drive market conditions • Cyber risk analytics: analyze external data to identify information and technology risks5 Risk Information Services Delivering value through risk and regulatory analytics 5
  • 6. The Deloitte differenceRisk Information Services in action rigorous analyses enabling faster turnaround times forDeloitte professionals have the advanced analytic critical decision-making information, better informedcapabilities that help companies transform everyday investment decisions, and increased long-term savings.information into useful and actionable insights. Our • A leading global pharmaceutical company madeRisk Information Services practice prides itself on a major acquisition. Deloitte performed valuationdelivering value-added solutions to our clients. and related accounting services. Using a customizedSome examples include: purchase-accounting tool, the company was able to• A large mortgage organization was developing a loan make accounting adjustments to manage the transition stratification and reporting program to comply with more effectively and understand tolerance for risk, making home affordable guidelines. Deloitte produced resulting in a smoother integration. models to classify delinquent loans in order to prioritize • A large retail client wanted to develop an integrated and remediate loans requiring specific and measurable master data management solution for two key data actions, identified leading risk indicators of troubled domains – suppliers and stores. Deloitte worked with loans and monitor business impacts, and defined the retailer to improve pricing management across its remediation steps to facilitate timely loan decisions. supplier base.• A global financial services institution was developing • A consumer products company was yielding lower an integrated risk analytics and information management gross margins due to its method of recording inventory approach to comply with data quality compliance. and costs of goods sold. Deloitte developed a cross- Deloitte analyzed the transfer of private investment functional solution allowing the company to identify management and Premier Asset Management account margin variances through detailed transactional analyses holdings, categorized the various move types, and to improve its inventory/cost of goods sold workflow. researched findings to properly capture and reconcile the • A purchase credit card company needed to mitigate conversion. Claims were analyzed to check if the trustee potential revenue recognition risks. Deloitte implemented held enough positions from various Trustee Control an analytics solution to reconcile customer transactions Depository accounts to cover claims. Deloitte identified against card member agreements. Using the tool, the and examined corporate actions to define and monitor company was able to monitor exceptions on a regular business impacts, and implemented a data infrastructure basis, identify customers who were undercharged for to support accurate data transfer and ongoing support services provided (to the tune of $4 million in a single for the organization’s data. year), and minimized their risk of misstating revenue.• A wholesale electric power supplier facing new power-supply requirements engaged Deloitte to leverage Deloitte’s experienced Risk Information Services cutting edge risk analytics methods and tools to analyze professionals provide technology solutions and risk the costs and risks of investing in new forms of power analytics services to help companies achieve their short- generation. As a result, the supplier produced new, more and long-term goals and objectives.6
  • 7. ContactsVivek KatyalPrincipalDeloitte & Touche LLPvkatyal@deloitte.comJeff TorstensonDirectorDeloitte & Touche LLPjtorstenson@deloitte.comAndrew NippertSenior ManagerDeloitte & Touche LLPanippert@deloitte.com Risk Information Services Delivering value through risk and regulatory analytics 7
  • 8. This document contains general information only and Deloitte is not, by means of this document,rendering accounting, business, financial, investment, legal, tax, or other professional advice or services.This document is not a substitute for such professional advice or services, nor should it be used as a basisfor any decision or action that may affect your business. Before making any decision or taking any actionthat may affect your business, you should consult a qualified professional advisor.Copyright © 2012 Deloitte Development LLC. All rights reserved.Member of Deloitte Touche Tohmatsu Limited