Regulatory changes and technological innovations lead banks to transform their business models to better manage risk, enhance client service and thus remain competitive, flexible and agile. In particular, the financial services organisations need to deploy a framework to support Basel III (for capital requirements and liquidity risk), MiFID II (for investment management), PSD II (for payments), Open Banking and GDPR, with these already in force. Inevitably, the aforementioned regulations affect the way banks are operating, which mainly impacts their relationship with customers, as these are greatly supporting transparency, ease and fast service.
However, such regulatory changes can also be seen as an opportunity to do business more efficiently and enhance one’s competitive advantage. The element that can accelerate compliance and organisational efficiency lies within digitalisation with new technologies deployed to address complex concerns.
According to Deloitte’s report “Financial Markets Regulatory Outlook 2018” the primary challenge for financial institutions and banks, in order to create a risk-free and compliant infrastructure accommodating local and international regulatory requirements, is to “adopt new approaches and invest in tools and strategies that can help them efficiently navigate the new complexity”. By investing in technological innovations banks can achieve performance efficiency and regulatory compliance across their operations and leverage opportunities for market growth through new products and services deliverance. This can help banks gain a significant value by streamlining their processes.
In addition, as mentioned in the report, the significant importance of stress testing scenarios and analytical reporting along with the introduction of the IFRS 9 standards highlights the necessity for banks to develop new risk management capabilities and methodologies to successfully meet regulatory demands. Thus, banks should reshape their business and IT structure via modern technologies and leverage industry best practices to achieve business agility, drive model efficiencies and remain ahead of the evolving trends and expectations. As a result, banks will be able to apply effective and holistic stress testing analysis, produce the required reports and perform regulatory capital calculations under IRB approaches as defined by each regulator.
The strategic deployment of modern technologies will allow banks to build a streamlined risk-averted architecture across the organisation, automate their full processes and improve decision making, while ensuring increased productivity, operational cost optimisation, transparency and sustainability.
Therefore, the evolving environment represents a pivotal opportunity for banks, provided that they will review and re-assess their strategies and move ahead from the traditional banking models and legacy systems towards digital transformation. Banks that recognise the importance to renovate using robust risk management techniques in their operations are the ones that will manage to comply more efficiently and effectively. Additionally, they are also more likely to achieve increased profitability and competitiveness in a rapidly changing marketplace.
From our interaction with clients across the globe, this becomes apparent. Those who use platforms can automate their reporting, easily create what-if scenarios and also manage their compliance-related operations with ease.
Our RiskAvert solution is a modern regulatory capital calculation and reporting solution for credit, market, operational and liquidity risk. Capitalising on the extensive experience of our team in the market responding on time and on budget to risk related projects, this system has been developed to competitively support the gathering and reconciling of data, calculating capital requirements, consolidating results and generating regulatory reports that comply with the relevant international frameworks (Basel ΙΙΙ and National Directives) and XBRL taxonomies. Through its robust open architecture, powerful regulatory calculations and risk MIS reporting engine, the platform provides a secure, flexible, auditable and transparent environment that enables banks to enhance the quality of their operations while effectively managing risk. It enables not only compliance but increased competitive capabilities.
Profile Software has a proven track record of successfully delivering risk management solutions that satisfy financial institutions’ needs, to comply with the required regulatory framework and are powered by in-depth knowledge and understanding of the regulatory landscape across the EMEA region.
About Profile Software:
Founded in 1990, Profile Software (www.profilesw.com) is a specialised software solutions provider with offices in key financial centers and a presence in 35 countries across Europe, the Middle East, Asia, Africa and America delivering market-proven solutions to the investment management and banking industries. Following the successful acquisition of Login SA, the Paris-based treasury software provider, the range of solutions offering has been enriched, whilst these can also be implemented as stand-alone. Profile Software is recognised as an established and trusted partner by international industry specific advisory firms. Profile Software’s solutions enable organisations to align their business and IT strategies, while providing the necessary business agility to proactively respond to the ever-changing market conditions.
