Ascential Software, the enterprise integration leader, has introduced software and services designed to enable financial institutions to comply with Basel II global financial risk management regulations.
Financial institutions need to demonstrate three years of advanced risk management by the accord`s current 2006 deadline to be eligible for minimum capital reserve requirements, requiring a 2003 start date. The Ascential initiative is tailored to map, standardise and transform that data, beginning this year.
The New Capital Accord (Basel II) is a regulatory framework developed by the Bank Of International Settlements, Basel, Switzerland. Basel II requires all internationally active banks at every tier in the banking group to track and publicly report exposure to operational, credit and market risks as a prerequisite to doing business.
"IDC`s Enterprise Technology Trends panel survey has shown that 46% of banks plan to increase their IT spending on risk management initiatives in 2003," says Jessica Goepfert, programme manager for IDC`s US IT opportunity: Financial Services. "Data integration is clearly a major pain point for such banks and financial institutions around the world as they ramp up to comply with the Basel II Capital Accord."
"An estimated $12 billion has been lost in the financial markets since 1992, through poor risk management and fraud," notes a Gartner report (IT Risk Manager Alert: Basel II Requires Security Actions, 30 August 2002). "In 2001 the Basel Committee on Banking Supervision issued a second set of proposals (The New Capital Accord, aka Basel II) to handle risk management throughout financial services. Banking and investments institutions should adopt this risk management framework by 2006," continues the report.
The Ascential initiative for Basel II Accord compliance includes the means to profile a financial institution`s operational data, map required data integration paths, standardise and transform data from disparate sources to ensure data quality, and provide inherent data audit trails.
All of these capabilities are delivered on the Ascential Enterprise Integration platform, which provides unlimited scalability, regardless of data volumes.
Financial institutions around the world are rapidly adopting advanced methods of measuring operational and credit risks as steps to preserve minimum levels of capital reserves and free additional capital to reinvest.
These approaches require complete and total accuracy in the data used to calculate risk, while at Basel II`s proposed go-live date of 2006, banks are required to have a three-year track record of advanced risk management to justify accuracy in their internal risk measurement approaches.
"For financial services organisations, 2003 is the year to invest in risk measurement solutions to remain as competitive as possible by compliance with the Basel II Accord," says Julian Field, MD of local Ascential distributor CenterField Software. "Ascential and its strategic partners are aggressively attacking this global problem with all of the elements required to supply those solutions."
Ascential is building on its reputation as a strategic supplier to financial services companies, with nine of the banks on Fortune Magazine`s list of "Top 10 Banks" (15 April 2002) running Ascential integration solutions, including the Bank of America, JP Morgan Chase and Bank of China.
The Ascential Basel II initiative will help financial institutions reach Accord compliance through:
* Automated source system profiling, needed to assess the content and structures of available data in a bank or institution, map the required data integration paths and allow institutions to identify missing data elements critical to Basel II compliance.
* Integrated data quality and standardisation, to align data from disparate sources, regardless of structure, and transform it to standardised, enterprise-wide structures. This capability is critical to ensuring that risk calculations are based on accurate data and that an institution does not misreport its risk exposure.
* Data transformation, to expose and deliver this information to target databases for risk assessment.
* Parallel execution for big-data batch and real-time processing, necessary for batch processing large data volumes within tight windows, and to deliver trickle-feed processing to support intra-day risk analysis.
* Inherent data audit trail, necessary to capture and document data sources, integration routines and risk assessment necessary to justify minimum levels of capital reserves.
* Integration methodologies and services offerings that leverage Ascential`s experience in hundreds of enterprise integration engagements.
* Data models, facilitating organisation, mapping and alignment of enterprise data.
* Collaborative partnerships with major global systems integrators.
" Basel II will soon come to consume the attention of financial executives as they contemplate the complexity and cost of compliance," says Field. "Ascential`s enterprise integration suite will help reduce this complexity and cost and ease the overall process."
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