Risk management solution provider SAS has this week launched the latest iteration of its risk management platform, which features a data integration layer that has been dubbed the SAS Detail Data Store (DDS) for Banking and aims to act as an intermediary between data warehouses and the risk analytics function. David Rogers, global product marketing manager for the risk division of the vendor, explains to A-Team Insight that the layer acts as a data support structure that is fed by raw data from firms’ data warehouses and on which they can build their risk analytics.
Although the current iteration of SAS Risk Management for Banking is aimed at retail banks and is suited for capital markets firms at the smaller end of the scale, the vendor is also working on a solution more tailored to larger players in these markets, which Rogers says will likely be available in the next six months.
“The DDS is the single source of information for the risk data warehouse,” explains Rogers. “It can be loaded on top of a data warehouse, for example a Teradata environment (which is a key longstanding partner of SAS and recently jointly signed up the National Bank of Abu Dhabi with the vendor), and provide a holistic and fit for purpose view of the data contained within that environment that can then feed the risk analytics system.”
Last year, Rogers spoke to A-Team Insight about the data related plans for the vendor’s risk division and this development is clearly a result of those endeavours. The current regulatory and market fixation on data quality will, no doubt, prove beneficial for the vendor in its push into the downstream data management for capital markets space. Basel III with its focus on transparency and a holistic view of risk data from across a firm is also a development on which the vendor community is pinning its hopes for investment at the moment.
SAS has certainly been talking up its enterprise risk management platform approach for some time, as well as its high performance risk calculation capabilities (but more on that later). Rogers indicates that the vendor is confident in its ability to provide an integrated view of risk appetite and the governance required to manage it, thus enabling firms to address Basel III requirements on liquidity, incremental capital charge and counterbalancing hedging assets.
The new DDS model has been designed with the banking industry in mind, he notes. The rationale is to eliminate or reduce inconsistencies in the data underlying risk management and analytics systems provided by SAS. This then enables the SAS Risk Management for Banking platform to support the integration and reporting of enterprise risk measures as well as incremental levels of the entity, business unit, geography or any other user defined hierarchy for this data. The vendor contends that the solution’s reporting capabilities also provide the audit, change, archive and historical data to support rigorous reporting requirements, both current and future, while harnessing the power of the SAS Business Analytics Framework
“There is acceptance within the industry that there is a need for a common data model for the data underlying the risk function,” says Rogers. “The SAS platform is data and system agnostic, and the underlying DDS models allow for the data to be made consumable for risk, and in some cases, the finance function.”
The idea of introducing a common data framework underlying the siloed risk function, where data is often kept at the level of the individual risk type (such as counterparty and credit versus market risk), is nothing new. It has been an industry talking point for some time. But when it comes to a common data framework across functions such as finance and risk, the industry is much further behind than the regulators would probably like. Some firms, however, are moving down this route: just look at Royal Bank of Scotland’s One Risk project for example. And this is where SAS is hoping to come into its own.
It will certainly be interesting to see, six months down the line, whether the capital markets industry is interested in the vendor’s tailored solution.