About a-team Marketing Services
The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

JWG Risk Report Finds Penalties Will Drive Firms to Improve Their Risk Information

Subscribe to our newsletter

JWG, the independent financial regulatory analysts, today released their latest research entitled ‘The new business of risk management’. The report is based on interviews with over 120 professionals from more than 45 financial institutions, as well as suppliers, supervisors and other industry professionals. Their extensive research has found that the new, intrusive style of supervision being adopted across the regions hit worst by the crisis, coupled with new penalties for those who do not measure up, will drive firms to develop a new target operating model for risk management.

As the blizzard of regulatory reform continues unabated, it has become clear that regulators are not satisfied with the manner in which firms currently manage their risk. Furthermore, new remedial tools – such as greater fines and, crucially, adjustable capital and liquidity buffers – mean that firms have a real incentive to meet their supervisors’ exacting standards. As such, the report found that the imperatives for better risk management are clear. A survey of professionals from 19 financial firms, conducted in the fourth quarter of 2010, found that:

? 90% believe improving risk data is a priority for their firm

? The majority thought that treasury, finance, strategic management and the front-office will all benefit from better risk information

? Only 32% thought that the need to improve risk information was driven primarily by regulatory compliance

? 90% are confident that their firm fully understands the imperatives – both business and regulatory – for better risk management.

PJ Di Giammarino, CEO of the regulatory think tank, JWG, commented: “The new powers bestowed upon supervisors mean that the business case for improving risk management capabilities is clear. The questions are now ‘where to start’ and ‘how to get the most bang for your buck’.

“Firms must think beyond their immediate priorities for risk – staying in business and out of jail – to determine what their target operating model is for risk management as a whole: what their new ‘business as usual’ should look like. The most successful firms will figure out how to implement required changes, such as the new Basel III ratios, alongside those they themselves want – improved MI and investor relations.

“The first steps towards this new ‘business as usual’ are establishing targets and cherry-picking a promising project to achieve a quick win, demonstrating proof of concept. However, getting this process started often relies on senior management asking the right questions. To this end, our next risk benchmark survey will cross roles and delve deeper into what needs to be done in 2011 to get both regulatory and banking communities to this tipping point.”

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: How AI can help trading venues ease the burden of post-Brexit MiFID II data continuity checks

Date: 6 October 2022 Time: 10:00am ET / 3:00pm London / 4:00pm CET Duration: 50 minutes Brexit has brought a number of additional challenges to trading venues, not least a new layer of complexity when fulfilling Markets in Financial Instruments Directive II (MiFID II) transparency requirements. This has been caused by ESMA increasing the data continuity...

BLOG

Know Your Customer Offers Company Data from Local Registries Across 123 Countries

Know Your Customer has released an expanded version of its Know your Customer/Know Your Business (KYC/KYB) solution that covers company data and official incorporation documents from 123 countries worldwide. The data can be consumed using either Know Your Customer’s user interface or a single API. The expanded service provides real-time access to local company registries...

EVENT

Data Management Summit London

Now in its 13th year, the Data Management Summit (DMS) in London brings together the European capital markets enterprise data management community, to explore the evolution of data strategy and how to leverage data to drive compliance and business insight.

GUIDE

ESG Data Handbook 2022

The ESG landscape is changing faster than anyone could have imagined even five years ago. With tens of trillions of dollars expected to have been committed to sustainable assets by the end of the decade, it’s never been more important for financial institutions of all sizes to stay abreast of changes in the ESG data...