Financial Risk Management: Integrated Solutions to Help Financial Institutions to Address Risk


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IBM’s integrated risk management solutions enable financial institutions to: Understand market and credit risk exposure across multiple silos to make financial and risk decisions consistent with business objectives; Secure all transactions and forms of interaction; proactively prevent increasingly sophisticated internal and external prohibited activities and effectively manage detected events; Proactively manage potential risks from events impacting operations, processes and applications - both from internal & external and business & IT; Understand and manage compliance across a dynamic set of voluntary and mandatory requirements imposed by multiple regulatory bodies, across operating jurisdictions, at an optimal cost for value.

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Financial Risk Management: Integrated Solutions to Help Financial Institutions to Address Risk

  1. 1. Paul Leonhirth – Integrated Risk Management Solutions, Banking & Financial Markets August 2010 Integrated Risk Management © 2010 IBM Corporation
  2. 2. Building a smarter planet The reality of living in a globally integrated world is upon us  Sophistication has outstripped our ability to handle it  Together government and industry must balance stability and innovation  To thrive, firms must innovate their business models  Daily interactions must deliver on brand promises 2 Source: Tower Group © 2010 IBM Corporation
  3. 3. Building a smarter planet The world is connected: economically, socially and technically 3 Source: Tower Group © 2010 IBM Corporation
  4. 4. Building a smarter planet The need for progress is clear 80% 93% Of financial services firms who Of the 285 million electronic say their governance, risk and attacks in 2008 were compliance processes are still focused on the finance not integrated across their sector, with well over half enterprise. detected by third parties. 25 billion 10,000 Global trading IT infrastructure Estimated number of are under extreme stress, banking regulations in the handling billions of market data US, with 4,000+ new messages each day. regulations in the pipeline. 4 © 2010 IBM Corporation
  5. 5. Building a smarter planet Top Risk Management Concerns and Challenges Credit Market Operational Compliance Risk Risk Risk Information  Total Exposure Information  Operational Risk Reporting  Credit Risk Reporting  Stress Testing Access Analytics  Limits & Utilizations  Market Risk Reporting & Analytics Integrity and  Overdrafts & Netting  Trending and Predictive Business Insight  Collateral Management Capabilities Data Quality and  Quality & Completeness of Source Data  Siloed Initiatives Governance of  Linking Data to Common Client/Institution  Data Aggregation Information  Recognition of Risk Management Needs  Data Lineage Process  Key Risk Indicators  Client Investment Agreements Improvement,  Credit Limit Approval Process  Multiple Risk Calculators Automation and  Credit Lending Process  Duplicate Functional Systems Rationalization  New Business Acceptance  GL Reconciliations 5 © 2010 IBM Corporation
  6. 6. Building a smarter planet Financial institutions must do their part to restore trust and confidence in the global financial system They will use transparency as a means to manage risk and as an engine for growth. Success requires people, process and technology improvements that include new and smarter ways of Measuring, modeling and applying risk-related information. 6 © 2010 IBM Corporation
  7. 7. Building a smarter planet Smart risk management is about collecting better information, using it more quickly and more effectively, and minimizing the need for human interaction in routine events 1 Smart is: Having a cross view of risk exposure 2 Smart is: Having the right mix of control across all points of vulnerability 3 Smart is: Mitigating risk by elevating and 4 Smart is: Automatically managing business leveraging IT processes 7 © 2010 IBM Corporation
  8. 8. Building a smarter planet 1 Financial Risk These solutions increase the quality, transparency and timeliness of your risk information while proactively managing your exposure and liquidity. Recognize and predict complex causal relationships.  Risk Insight and  Credit Analytics Optimization Solution for  Scalable Architecture Financial Services for Financial Reporting 8 © 2010 IBM Corporation
  9. 9. Building a smarter planet 2 Financial Crimes These solutions help in real-time risk-monitoring, continually updating user profiles, associations and patterns of behavior.  Anti-Money Laundering  Threat and Fraud Intelligence Investigations, Alert  Identity and Access Modeling and Analytics Management Platform  Integrated Fraud and Financial Crimes Platform 9 © 2010 IBM Corporation
  10. 10. Building a smarter planet 3 Operational & IT Risk These solutions continually track emerging and evolving threats to physical and IT infrastructure assets. Institute a holistic response to business and operational risks.  Operational Risk Reporting  IT & Infrastructure Risk & Information Foundation Resilience, Data Encryption  Enterprise Security Risk and Leakage Protection Monitoring, IT Security  Managed Identity, Business Infrastructure Continuity & Resiliency Services 10 © 2010 IBM Corporation
  11. 11. Building a smarter planet 4 Governance and Compliance These solutions help adopt a holistic approach to your obligations analysis—driving the control and oversight of your business processes by aligning IT strategy with business strategy.  Compliance Information  Inventory of Obligations Lifecycle Management  Monitoring and Reporting 11 © 2010 IBM Corporation
  12. 12. Building a smarter planet Building Capabilities for Smarter Banking: Integrated Risk Management Integrate siloed data to Leverage insights to Monetize data to achieve Unique value realized improve positions and increase visibility of performance goals and regulatory reporting both threats and improve business resilience opportunities Optimize Analyze 3 Outcomes Manage 2 Patterns 1 Data Cost containment End-to-end visibility Manage risk appetite Loss mitigation capability Customer retention Data for compliance Reduction in fraud losses Business resilience Enabled by the IBM Banking Industry Framework Use of Smarter Planet capabilities 12 © 2010 IBM Corporation
  13. 13. Building a smarter planet Banking Industry Framework for Integrated Risk Management Enables you to holistically manage risk across the enterprise with an integrated set of software and service assets developed through multiple projects within four core risk management domains. Key Benefits:  Faster deployment  Lower Risk  Support for adoption of open & industry standards  Offer choice of business applications from IBM & its partners  Simplified enterprise architecture 13 © 2010 IBM Corporation
  14. 14. Building a smarter planet Integrated Risk Management — Solution Focus Areas  Risk Data Management for Credit, Market, Liquidity Risk  Risk Insight for Banking Risk and Performance  Real Time Risk, BI and Reporting Solutions  Risk Analytics, Risk Optimization, Analytics and Insight ISAS Predictive  Quantitative Risk Modeling and Scenario Analysis WAS, BPM, ILOG BRMS Analytics  Automate Resolving False Positives and Alert Triage Financial Financial  Integrated Fraud and Financial Crimes platforms Crimes Crimes ITSM, TSIEM, TCIM  AML/Fraud Operational Effectiveness and Risk Mgmt Operational Financial Operational and IT risk  Customer Identification and KYC, Customer Risk Ratings Risk and IT Risk  Entity Management / ID Relationship Resolution Financial Integration  Investigative Case Management with Web 2.0 Risk Integration Optimization Optimization Analytics Analytics  Comprehensive Security Risk & Control Management Collaboration Collaboration Governance Security Governance and  Trusted Identity Management – Identity & Access Security and Resiliency Compliance  IT Service Management – Asset, Configuration, Incident, Resiliency Compliance Change, Release Management (ITSM, CRDB, ITIL)  Proactive, DB activity/control monitoring, event correlation, analytics and IT Risk Mitigation techniques Integrated Risk  Application Security, IT Risk, Integrity & Privacy Management AppScan, Compliance IoO  Compliance Information Lifecycle Management  Compliance Inventory of Obligations for Corporate Governance and Internal Controls  Sales and Market Conduct Compliance  Regulatory Compliance, BI and Reporting 14 © 2010 IBM Corporation
  15. 15. Building a smarter planet We’ve only just begun to uncover what is possible on a smarter planet. The world will continue to become smaller, flatter and smarter. We are moving into the age of the globally integrated and intelligent economy, society and planet. There’s no better time to start building a smarter financial system—focused on restoring public and governmental trust and breathing new life into the global economy. Let’s work together to drive real progress in our world. For more information, visit 15 © 2010 IBM Corporation