Banking

For your Department: Risk Management

Banking is about managing risk across multiple risk types. In fact, the bank's raison d'etre is to accept structured uncertainty and manage the associated risks with the goal of capitalizing on these risk differences to earn profits. The skill with which the bank balances alternative risk/reward strategies will determine its ability to deliver on shareholder returns. However, in a market environment where competition, globalization, market volatility, and structural change are increasing, banks need to manage their risks even better and with greater transparency. In addition, Basel II requirements have galvanized financial institutions across the world to re-evaluate the role of risk management.

Barriers to an integrated risk management process include:

• Lack of consistent measurement methodology
• Hidden information gaps in the quantification of risk
• Lack of integrated risk procedures that are "owned" by a specific functional role embedded in the organization.

In order for IT to help the risk management department overcome these barriers they must invest in solutions that combine many types of risk, such as credit risk, operational risk, interest rate risk, liquidity risk, price risk, compliance risk, foreign exchange risk, reputation risk, country risk, management risk, and more. In our new book, The Performance Manager for Banking, IT and Risk Managers can learn more about performance management as it pertains to decision areas such as:

• Credit Risk: The possibility of a loss due to a failure to meet contractual debt obligations
• Operational Risk: The risk of loss resulting from internal processes, systems, and people, or from external events
• Market Risk: The risks associated with various classes of assets and liabilities.

Download the Risk Management chapter
Download the whole book

The Performance Manager is just one way Cognos, an IBM company, is supporting better risk management processes across your organization. Click here for information on:

• IBM Cognos Risk-Adjusted Profitability Performance Blueprint: Find out how you can build precise multi-dimensional, product-level profitability plans and forecasts that are completely aligned with risk management using the IBM Cognos Risk Adjusted Profitability Performance Blueprint.


• The IBM Cognos Risk Management Cockpit for the Banking Data Warehouse: Learn how this solution helps financial services organizations deploy a compliance infrastructure that provides a holistic approach to satisfying Sarbanes-Oxley, Basel II, the Patriot Act, and other regulatory requirements.


• Top 10 Answers from the World's First Chief Risk Officer: Read what James Lam, President of James Lam and Associates, Enterprise Risk Management Specialists, says in response to the top 10 questions received during his recent Web seminar with Cognos.


• Basel II and Performance Management: Learn how performance management enables every step towards Basel II compliance, and lets your company use the intelligence it must gather to move beyond compliance and toward higher performance.


• Find out how Unicredit integrated 90 data sources to create an award-winning environment for modeling and managing risk.

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