Given the wave of innovation in technology, our team has been researching the impact of technology innovation on the risk analytics and compliance world. Based on many interesting conversations with Risk and Compliance Managers around the world, we see some consistent patterns from an end user’s perspective:
1. Self Serve Analytics – Most end user are demanding that advanced analytics be simplified and provided as self-service. So are the days of waiting for batch-based risk reports are numbered? I do not think so – certainly not yet! But, with increasing focus on liquidity risk, capital buffers etc., the end users would most certainly need more real time self-serve capabilities.
2. Computing Capacity – As the volumes and complexity of the portfolios increases, the computing capabilities of the past are simply not enough to keep up with the number crunching needs. Now I am a bit biased here, but the Microsoft PowerPivot plug-in for Office Excel 2010 and Office Sharepoint 2010 will be game changers in the analytics and number crunching capabilities. Imagine end users being able to slice and dice over 100 million rows of data in a matter of seconds. Now that will be something!
3. Visualization – One of the interesting projects I participated in, was to develop a Risk dashboard for the board-level risk oversight meetings. Sometimes the board meetings can be pretty dull, and, after a few heavy sessions, it does become a challenge to hold the board members attention to some fairly heavy quantitative risk profiles. So the CRO adopted a highly visual dashboard to make the Risk oversight discussion much more animated and interesting for the board. Also, something that many banks with complex derivatives exposures have started to depend a lot on. So more power to dashboards and traffic lights based visualization!
4. Pattern Analysis of Unstructured Information – As the market surveillance gets much stringent, the concept of control rooms and surveillance functions is increasingly becoming critical. An emerging pattern is the need to merge qualitative and quantitative information across the organization into actionable alerts. This has been done for market data to a large extent but being able to discover business insights from previously ignored rich source of unstructured information is gaining ground as an advantage. The innovation around Enterprise Search will help drive this even further.
I would be interested to know what you think. You are invited to leave your comment below.
We are also currently working on compiling results on global risk survey with the Professionals Risk Managers International Association (www.PRMIA.org). The results throw up some interesting results, but more on that in my next blog.