Dear,
Some weeks ago I had a very interesting conversation with a colleague about Information Systems Architecture for Analytical Banking. We've being working together in the planning of an Accounting for Financial Instruments project for a while, but he wanted to discuss about enlarging the scope of the project.
Apparently, there's a growing concern in the IT department of his bank due to the difficulties on reducing TCO and comply with the new regulatory requirements.
He knows the Financial Data Base of Bank Analyzer is the reporting hub for providing the Single Source of Truth in Analytical Banking. This is the foundation of an Information System ready to fulfill the Credit Risk, Market Risk, Liquidity Risk and Accounting regulatory requirements, without having to replicate the banking data on silo-style systems.
But building a centralized architecture, capable of supporting current and future regulatory reporting is a difficult challenge.
Historically, Market Risk, Credit Risk, Liquidity Risk, Capital management and Accounting departments of Banks have worked as silos, with limited capacity of reconciling data and independent objectives.
It's clear that Dodd–Frank and European Market Infrastructure Regulation are increasing pressure on forcing Financial Services system agents to provide reconcilable and detailed data about their Investments, Risk Exposures and Financial positions, but it's also true that those efforts have not been proved to be fully successful till now.
On the other hand, most Banks, even those in which governments took position after 2008 turmoil, work as private organizations, driven by yearly departmental budgets and objectives, and they have their results scrutinized every quarter by market analysts. Planning long term and strategic changes with those constrains and in the current market conditions is not easy.
Building a centralized single source of truth for regulatory reporting is not just a technical decision; it's a strategic one that requires executive management support and long term budget.
The advantages are clear and include the following, better reconciling capabilities, reducing TCO and enhanced visibility.
But the challenges are also big; amongst others, the main is the necessary change on Bank's culture; this is not another crisis and the new tendency of increasing regulatory requirements is not just a temporary fashion, it's the driver of a major transformation in the Financial System from a business model based in Volume to a business model based on efficient management of Capital.
Technology is available or close of being available, but changing organizations' culture will take longer.
Looking forward to read your opinions.
K. Regards,
Ferran.
Apparently, there's a growing concern in the IT department of his bank due to the difficulties on reducing TCO and comply with the new regulatory requirements.
He knows the Financial Data Base of Bank Analyzer is the reporting hub for providing the Single Source of Truth in Analytical Banking. This is the foundation of an Information System ready to fulfill the Credit Risk, Market Risk, Liquidity Risk and Accounting regulatory requirements, without having to replicate the banking data on silo-style systems.
But building a centralized architecture, capable of supporting current and future regulatory reporting is a difficult challenge.
Historically, Market Risk, Credit Risk, Liquidity Risk, Capital management and Accounting departments of Banks have worked as silos, with limited capacity of reconciling data and independent objectives.
It's clear that Dodd–Frank and European Market Infrastructure Regulation are increasing pressure on forcing Financial Services system agents to provide reconcilable and detailed data about their Investments, Risk Exposures and Financial positions, but it's also true that those efforts have not been proved to be fully successful till now.
On the other hand, most Banks, even those in which governments took position after 2008 turmoil, work as private organizations, driven by yearly departmental budgets and objectives, and they have their results scrutinized every quarter by market analysts. Planning long term and strategic changes with those constrains and in the current market conditions is not easy.
Building a centralized single source of truth for regulatory reporting is not just a technical decision; it's a strategic one that requires executive management support and long term budget.
The advantages are clear and include the following, better reconciling capabilities, reducing TCO and enhanced visibility.
But the challenges are also big; amongst others, the main is the necessary change on Bank's culture; this is not another crisis and the new tendency of increasing regulatory requirements is not just a temporary fashion, it's the driver of a major transformation in the Financial System from a business model based in Volume to a business model based on efficient management of Capital.
Technology is available or close of being available, but changing organizations' culture will take longer.
Looking forward to read your opinions.
K. Regards,
Ferran.
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