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Operational risk management for financial services

Align risk exposure with business objectives

Operational risk is a new frontier compared to credit and market risk. Changing regulatory guidelines are increasingly challenging to interpret and apply. Ultimately, managing risk and return becomes an efficiency management task. In the current state, magnanimous risks, such as reputation risk, have emerged as great killers of shareholder value. IBM has developed methods to measure and help you manage this great new risk.

 

Prevent, protect and prosper<

Operational risk management for financial services from IBM helps your enterprise take an instrumented approach to risk mitigation. Every transaction and change in location, state or condition becomes a source with the potential to deliver valuable insight. It includes the optimization of existing data—and its underlying structure—including tools like data models, cleansing, de-duplication, movement and consolidation.

The solutions can help financial services firms comply with regulatory burdens and encourage an interconnected systems design built on a single source of the truth that provides data that is authentic, relevant and referable

And for a more intelligent approach to risk management, the solutions include operational risk monitoring and control to quantify risks from the bottom up, improve understanding through causal analysis and best manage risk through effective key indicators.

 

Take a proactive, not a reactive approach

IBM understands that business risk management needs to be operationalized through IT. To that extent, our risk experts are able to prepare solutions that meld business requirements and their effective execution through IT.

• Start from the bottom up to assess and control operational risk, developing a deep understanding of event causation and true key risk indicators to prioritize mitigation investments.
• Quantify risk assessments and impact analyses in terms of their financial or business continuity impact.
• Leverage assessment templates and knowledge of best practices to speed the assessment process and facilitate identification of improvement targets.
• Integrate information from security event monitoring across the enterprise to maximize the value of collected information, ensure its application to regulatory auditing, and maximize chances for related event correlation.
• Select operational and IT risk mitigation investment programs based on regulatory requirements as a baseline and business value as an optimization point.

 

Transform, optimize and adap

Our operational risk management portfolio includes solutions that can help you model the potential economic and social impact of significant operational events, including:

• A broad set of intellectual capital such as risk and control self-assessment (RCSA) templates and operational risk requirements, process maps, control libraries, test libraries, governance models, roles and responsibilities, future state roadmaps and more to accelerate project delivery.
• Operational risk capabilities that leverage all of this, as well a broad understanding of financial regulations and market drivers developed through years of engagements with financial services customers.
• IBM Research assets deployed in banking and financial markets organizations that focus on advanced statistical and modeling capabilities, including:
  • Cyber intelligence as a forward indicator of risk sentiments in support of corporate brand and reputation analysis (CORBA).
  • Pandemic Impact Business Modeler (PIBM), an intelligent model for integrating company financials, helping to prioritize risk events and defining appropriate risk mitigation strategies specific to pandemic scenarios.
  • Operational risk quantification (ORQ) analytical tool to quantify and mitigate operational risk by addressing key challenges driven by regulations such as Basel II.
• The IBM® Risk Center of Excellence and Global Delivery Center offers capabilities to assess IT risk management using the COSO / COBiT Framework; analyze IT regulatory impacts; model IT risk and perform risk training; provide IT deployment support and third-party assessments.

 

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