SunGard's 2010 risk management trends

Regulators, investors and managers have changed their view of how financial institutions need to be run and how the markets need to be controlled, says Marcus Cree, director of risk solutions for SunGard's capital markets and investment banking business, reports Insurance News Net.

In its outline of 10 trends shaping risk management and technology in 2010, the company said chief risk officers will intensify management oversight to satisfy stakeholder demand for risk transparency and expected levels of risk exposure.

“They demand more disclosure, improved risk management, and more capital control,” explained Cree. “To achieve this, firms need a risk infrastructure that supports the ability to pinpoint their exposure, better manage capital flows and achieve a holistic view of risk across the enterprise.”

Banks looking to garner advanced measurement approaches for assessment and management of operational risk require a comprehensive framework for capital estimation, which incorporates loss events across the enterprise, writes Market Watch.

With this in mind, Union Bank has selected SAS to help manage risk more efficiently, after determining that SAS OpRisk VAR, an analytic value at risk model, would help the organisation slice, dice, drill down, adjust, trend and plot operational loss data at will.

"SAS offered a comprehensive solution that specifically addressed operational risk with customisable modelling capabilities,” says Greg Jones, vice-president of operational risk at Union Bank.

The top 100 financial institutions will spend over $100 billion a year implementing risk governance frameworks by 2012, according to research from business advisory firm Deloitte, says Finextra.

This is more than double the figure they spent on risk and control activities in 2006, the last full year before the financial crisis, says Deloitte, which surveyed chief risk officers or equivalents at 28 financial institutions, including investment and retail banks and insurers.

Most respondents expect spending on risk and compliance to continue to rise and say much of it is a direct result of the global financial crisis. Money is being spent on people, computer systems and meeting Basel II and Solvency II capital standards.