Financial institutions are at risk - the time is now to solve it

Companies today operate in a world that is driven and partly enabled by IT infrastructure - and nowhere else would you find this to be more prevalent than in the financial services sector.

Today`s global and South African financial institutions are more reliant than ever on their IT infrastructure, which in turn translates into massive operational risk. And as clearly stated by Basel II, operational risk is an element of risk management that needs to be looked at with more urgency and understanding.

Financial institutions are plagued by disparate systems that in turn escalate complexity - and this is only the tip of the iceberg.

The reality is that companies have to start looking at frameworks and solutions such as IT software management solution that can drive down this complexity, while at the same time enabling the establishment of clear policies as well as other important management functions such as asset management.

Whichever way you look at it, there is a definite need for managing financial institutions` environments in a more dynamic manner that enables real-time decision-making and problem-solving.

Also, business decision-makers need to know the risks of using technology to make enterprises` business processes more effective.

Security information management (SIM) products are positioned to address a number of gaps within financial institutions` IT systems - delivering the insight needed to assess business risk and technology vulnerability, therefore, operational risk.

Indeed, some SIM solutions now offer functionality that comprises the management of business risks associated with the daily use of technology deployed.

And this is what financial institutions need: self-managing software that detects problems in real-time, while at the same time enabling organisations to run IT as a business, not as a separate, uncontrollable entity.

By focusing on the intersection of business asset values, threats and vulnerabilities, SIM solutions help the enterprise to move beyond managing technology controls and into an active profile for managing business risk.

Also, SIM solutions offer unique views of risk that are analysed by different business functions - HR, legal, auditing, IT, finance and compliance.

Financial institutions must also move beyond the mere technology solutions, adopting a culture of IT service management that is driven by proven industry frameworks such as the ITIL (IT Infrastructure Library) standard.

Through service management, organisations will be able to align their technology with services - improving overall service-delivery to their very important customers.

Looking again at operational risk management - this is an issue that can`t be addressed lightly. A division dedicated to operational risk management should be established within a financial institution - simply saying that "we`ve had systems in place for years" won`t cut it.

Another differentiator is clearly assessing what you have, therefore, asset management. In fact, it wouldn`t be unfounded to say that the foundation of effective management lies at the heart of asset management.

If institutions can come to a point where they can utilise their assets as well as people they`re well on their way to establishing IT systems that don`t increase risk, but prevent it.