IBM RegTech Innovations

A new era of technology enabled financial risk management: Advanced analytics and aggregation

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In this series of blogs, we focus on four high-growth transformative technologies with emerging risk applications which can help banks and financial institutions complete and protect the enterprise. Today we discuss how advanced analytics and aggregation software can address limitations in computational power and granularity required to meet evolving regulatory demands.The other three emerging technologies are cloud, big data and of course, AI. In the IBM whitepaper, A new era of technology-enabled financial risk management, discover in greater detail how to apply these technologies to help modernize risk management capabilities.Transformation, for financial institutions, is crucial because of realities including increased regulation, new expectations for transparency and profitability, and continued explosive data volume growth. And by “transformation.” we mean – at minimum – modernizing outdated risk systems and optimizing infrastructure in order to ready the organization for current and future success.

“A key challenge for banks is the lack of systems needed to efficiently aggregate data from across the banking group for use in
stress tests.” –  
Basel Committee on Banking Supervision (BCBS) report, December 2017

Banks and financials institutions regularly work with complicated analytical and reporting challenges, but a continuing concern is successfully aggregating and using the data produced by various systems and stored in multiple locations.Such challenges are well-documented. The Basel Committee on Banking Supervision (BCBS) released a 2017 report noting that a key issue for banks is the lack of “systems needed to efficiently aggregate data from across the banking group for use in stress tests.”Advanced analytics and aggregation technology can be applied to dynamically aggregate data and conduct large scale, real time analysis. Ideally, the technology enables financial institutions to clarify results, identify trends, and to find and address data problems. With this technology, firms can perform rapid and sophisticated scenarios to unearth new understanding by grouping the data across any dimension and varying the way computations are executed.

An example is the IBM Workspace Analyzer for the Enterprise solution. It uses advanced analytics and aggregation technology to produce complex calculations and deep analyses of enterprise-wide data in a timely manner. The beauty of the technology is the capability and computing power of the platform to load and navigate varied and massive data volumes that are in different places. Users can extend Workspace Analyzer for the Enterprise to perform custom calculations by incorporating bespoke calculation across any data set.

Clients have used Workspace Analyzer to aggregate terabytes of data in just seconds. The offering is built on the IBM Workspace Analyzer platform, an in-memory platform that aggregates and manages data across multiple sources in real-time. A powerful aggregation and analysis platform, the software provides a configurable, self-service environment to the end user.

Waiting will not work
There are challenges to advanced analytics and aggregation adoption such as learning curves with IT and system complexity and migration issues. Organizations that wait to adapt to these capabilities however may find themselves lagging in competitive capabilities and regulatory compliance. Explore these ideas in more depth in the IBM white paper A new era of technology-enabled financial risk management.

Also see our related blog post, A new era of technology enabled financial risk management.

Global Head, Customer Solutions Group, Risk & Compliance, IBM Watson Financial Services

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