Strategic Innovations in Risk Management (Part 2): Architectural Strategies for Growth

by Cubillas Ding, September 3, 2013
Industry Trends
Global

Abstract

Financial firms need to rebuild their architectural foundations and leverage rapid advancements to maximize technology innovation, At the same time, they should focus on maintaining resilience and efficacy in risk management and compliance operations.

In the second installment in a series, Strategic Innovations in Risk Management (Part 2): Architectural Strategies for Growth, Celent examines the innovation dynamics happening in risk management as well as the underlying dimensions that drive, facilitate, and profit from these dynamics. The report highlights industry examples and recommends key architectural strategies and IT management approaches to help firms accelerate growth and contain costs.

Firms must be resolute in establishing architectural and IT management building blocks to not only support compliance initiatives, but more importantly, lay the groundwork for sustainable, risk-aligned business change and innovation advantage in the following areas:

  • Discipline and execution of data quality management.
  • Large-scale, next-generation service-oriented approach to technology deployment.
  • Smart architectural and IT management approaches to implement common business, client, and product reference data.
  • Reunification of trading and risk systems driving simplification and speed.
  • Integrated finance and risk data warehousing.
  • Real time architecture for price, market data, and risk analytics.
  • Strategic management and execution levers in IT sourcing and delivery

“Necessity is once again the mother of invention,” says Cubillas Ding, Celent Research Director and author of the report. “Out of the financial crisis, competitive necessity and strategic ambitions are leading forward-looking firms to rebuild the right foundations.

This report provides examples and industry case studies that highlight architectural strategies as well as IT management approaches that will help firms navigate changes and facilitate higher-level business innovation. Case studies and insights are based on what Celent considers best practices at several financial institutions, including Bank of America Merrill Lynch, Barclays, Citigroup, Credit Suisse, Goldman Sachs, HSBC, JP Morgan, and UBS.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

1

The Imperative for Innovation

2

Innovation in Risk Technology and Operations

3

 

Architectural and IT Management Strategies

3

 

Renewed Discipline and Strategies for Data Quality Programmes

4

 

Next-Generation Large-Scale IT Service Orientation

6

 

Smart Approaches to Business, Client, and Product Reference Data

8

 

Front and Middle Reunification of Trading and Risk Systems

11

 

Integrated Approach to Risk and Finance Data

12

 

Architecture for Real Time Front-to-Back Risk Ecosystem

15

 

Management and Execution Levers in the Sourcing and Delivery of Technology

16

Final Thoughts

19

Leveraging Celent’s Expertise

19

 

Support for Financial Institutions

19

 

Support for Vendors

19

Related Celent Research

20

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