The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

SunGard’s Hug Talks up the Need for an Integrated Framework for Risk and Capital Management

Share article

There is a gradual change going on across the industry from considering compliance with the Basel framework as a box ticking exercise to using these underlying risk management practices as an opportunity to more intelligently allocate capital, conduct profitability analyses and make better business decisions, according to Andi Hug, general manager for SunGard’s Ambit Risk and Performance Management business unit. Hug’s particular unit largely focuses on tier two and three institutions looking for solutions to meet their risk management requirements and he notes that the integration of the middle and back office functions with the risk function is key to success in this endeavour.

“There is a new business imperative to improve liquidity management and mitigate operational risk via a more integrated framework for capital management,” he explains. This is why strategic investment in risk management solutions such as those offered by SunGard and its competitors is happening with more frequency. It is not just about compliance, it is about managing a firm’s business in a more joined up manner.

Firms are seeking out greater integration between back office and compliance functions with traditionally front office focused risk management functions. This is to enable firms to approach setting desk level risk limits, for example, with much more information at hand.

Moreover, although regulators have been less aggressive than expected in taking enforcement action, liquidity risk management also remains on the agenda, according to Hug. “There may be a conception amongst medium sized banks that the problem has gone away, but it hasn’t fallen off the regulators’ radar,” he says. “I expect much more investment in the space going forward, as regulators move to take enforcement action.”

Hug is not alone in making this judgement, SAS marketing manager for Financial Services Duncan Ash is also convinced the market for these solutions will witness an uptick, as regulators get on the same page as each other in light of Basel III.

In order to ensure it is keeping ahead of the competition, SunGard is adding strategic partnerships to its roster, including a partnership with complex event processing (CEP) vendor Streambase, signed earlier this year. For now though, Hug reckons that in spite of the M&A activity going on in the risk management solution space, most of the competition has yet to properly integrate the functions of the boutique vendors they have recently acquired.

Related content

WEBINAR

Recorded Webinar: How Financial Institutions can adjust to working in the New Normal

The very sudden impact of Covid-19 and resultant shutdown of physical sites has stress-tested financial institutions and vendors to their limits. Now banks and firms are slowly starting to re-open offices. But what will the new normal look like and what steps should you be taking now to make the most of this situation? This...

BLOG

SWIFT Delays ISO 20022 a Further Year

In its March 2020 meeting, SWIFT endorsed ambitious plans for the group to support financial institutions’ payments and securities businesses – but confirmed that implementation of the ISO 20022 would be delayed by 12 months, following “feedback from the community.” ISO 20022 aims to create a single standardisation approach (including methodology, process, repository) for all...

EVENT

RegTech Summit Virtual

The RegTech Summit Virtual which took place in June 2020 was a huge success with over 1,100 delegates registered. We are currently working on our plans for 2021 and we hope to be back with an in-person event. Whatever the future holds you can guarantee our 2021 event will be back with an exceptional guest speaker line up of Regtech practitioners, regulators, start-ups and solution providers to collaborate and discuss innovative and effective approaches for building a better regulatory environment. Can't wait until 2021? make sure you sign up to our RegTech Summit Virtual, November 2020. More info...

GUIDE

Entity Data Management Handbook – Sixth Edition

High-profile and punitive penalties handed out to large financial institutions for non-compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations have catapulted entity data management up the business agenda. So, too, have industry and government reports on the staggering sums of money laundered on a global basis. Less apparent, but equally important, are...