A Holistic View of Risk Across the Enterprise: How Data Linkages Help

Gaining a comprehensive view of their risk exposures has long been a challenge for financial institutions. Standard measures have been embraced to measure and manage market risk, and the emergence of a standard legal entity identifier in the form of the LEI has gone some way toward addressing the issues of counterparty and credit risk that underpinned the Credit Crisis of a decade ago. But regulators anxious to avoid a repetition of the events of 2008 have tightened the rules around risk exposure and are increasingly requiring banks and other financial firms to get a more holistic view of their exposures to markets, countries, issuers and counterparties, especially as regards entity verification. Regulations such as the EU’s Solvency II and Basel’s Fundamental Review of the Trading Book (FRTB) have mandated a new approach to overall risk – but firms are still struggling with solutions.

While commercial entity hierarchy solutions exist, they have not been embraced by the marketplace – due in part to the cost element, with expensive and extensive reference data sets often required for implementation. Nor have in-house solutions fared much better, proving for the most part both expensive and difficult to maintain, particularly given the complexity of global operations and the often-siloed organisational structure of many large firms, both of which make it a challenge to identify the linkages across the enterprise required to provide a holistic view of risk.

Download this white paper to:

• Identify the detailed regulatory drivers that necessitate a new approach;
• Explore the obstacles to achieving enterprise-level risk management (and their solutions);
• Learn what is needed to address entity hierarchies and country of risk using a proactive and robust approach to data-mapping;
• Discover a new approach to entity data linkages.