Risk management vital in SA

To make informed decisions related to risk, organisations in the energy, utility and financial services sectors need thousands of data elements from a multitude of systems.

A single risk model for an energy company, for example, might require information about production plant gas consumption, hourly energy usage, customer demand per region and future demand given different weather scenarios and rate changes.

"Sophisticated risk management software can help organisations solve the data problem - through the creation, administration and integration of a global risk data warehouse - and collect and integrate all this data for risk analysis," says Bruce Jones, sales support manager at SAS, the market leader in providing a new generation of business intelligence software and services that create true enterprise intelligence.

"Analytics enable decision-makers to evaluate multiple dimensions of risk, as well as their institution's overall risk, and take appropriate actions as needed."

Jones believes that in SA there are certain issues making risk management even more vital.

"South African banks have always had to contend with high levels of fraud," he says. "In addition, as we are a developing country, financial institutions that have not managed their risks adequately have paid the ultimate price. Having said that, however, no bank anywhere in the world can afford not to measure and monitor its risk."

By deriving intelligence from existing operational data and systems, an organisation can achieve sustainable competitive advantage. An intelligent organisation is better able to predict how future economic and market changes will affect business - and quickly adapt to those new conditions. This reduces the need for guesswork and hunches, cutting down on costly false starts. "With SAS Risk Management, organisations can pull together, analyse and leverage risk data to more intelligently trade commodities and derivatives, while keeping within corporate parameters," says Jones.

"Executives and managers can access up-to-the-minute information about the company's overall risk picture. Demonstrating a firm handle on risk exposure is particularly important when communicating with customers and shareholders."

Several South African companies are investigating SAS Risk Management. Dozens of US and European leading energy and financial services firms have already turned to SAS to power their risk-management efforts.

These include:

* Barclays Bank, one of the largest banks in the UK, is managing its risk with SAS Risk Management.

* Calpine, an independent power company that generates and markets power throughout the US and in Canada and the UK, uses SAS Risk Management in its energy trading operations.

* Dominion, one of the leading electric power and natural gas companies in North America, relies on SAS Risk Management to power risk management efforts for its energy marketing and trading operations.

* Swiss Re, a world leader in reinsurance, is running SAS Risk Management in production and producing daily delta normal results.

SAS Risk Management enables organisations in the energy, utility and financial services industries to perform enterprise risk management. It provides an open, flexible and extensible environment for accessing and bringing together position and market data from global operations, analysing and exploring this data to compute risk measures, and communicating and reporting this risk intelligence throughout their organisations - from the trading floor to the boardroom. It incorporates SAS's industry-leading technologies, data management, high-end analytics and robust reporting.

SAS recently announced it will launch the newest version of SAS Risk Management later this quarter. Release 3.3 will include enhanced analytics to help business and risk professionals analyse and explore position and market data from their trading operations more quickly and accurately to determine their overall risk exposure.