According to recent surveys, institutions recognize the need to enhance their risk management capability. 100% of firms surveyed recognize the need to improve the functionality of their existing risk management IT systems, 43% (especially banks) believe they must improve their business processes, and 29% recognize that their risk management capability can be significantly enhanced by adopting new risk management frameworks such as Basel III and Solvency II.
Banks are well capitalized, but deregulation and increased exposure to global market forces will drive risk management upgrades, such as CVA. Asset management companies require integrated, multiasset portfolio and risk management technologies in response to greater investor sophistication and a broad range of financial products. Securities firms face challenges of managing more complex, interconnected risks. In the report, Risk Management in China: Trends and Challenges for Banks and Securities Firms, the author will provide his viewpoints in the risk management challenges, trends, and methods in China.
In order to compete effectively on the global stage—and against both foreign and domestic competitors at home—financial institutions will need to develop world-class risk management capabilities. Firm-wide customer and counterparty views across investments and financial management and risk data repositories are critical for financial institutions.