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Integrating risk and finance: the technology is ready, are you? 

April 28, 2014
Suresh Gopalakrishnan, Eric Reich, Ernest Martinez, Business Technology

Regulators now insist that large financial institutions are capable of monitoring and managing their risks in a timely manner and on an enterprise-wide basis.

In addition, institutions are being mandated to reconcile the data used in risk management to the data used in financial reporting. This is easier said than done. A 2013 report from Chartis Research showed that 88 per cent of risk and finance practitioners in banks see the integration of their functions as a major priority. However, more than half have yet to implement an enterprise-level plan to achieve this integration despite clear business drivers.

Why is this so hard?  There are many challenges. Fundamentally, the focus and functions of finance and risk are different and, over time, each group has developed its own set of systems, tools and processes to manage their requirements. For example, a finance focus includes financial reporting (which imply a balance sheet and income statement-centred view and general ledger data hierarchies), profitability, planning and budgeting, and costing.

Read more: Business Technology

 
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