Optimizing Risk Management Operations with Cloud and Machine Learning
Abstract
TCS briefed Celent on its recently developed Intelligent Cloud BURST (icBURST) and Intelligent Risk Scenario Creation offerings in July 2019. This briefing note summarises our key takeaways.
- Intelligent Cloud BURST is an automated cloud bursting framework for efficient infrastructure utilization and load management for computationally intensive tasks.
- Intelligent Risk Scenario Creation is a machine learning powered offering for market risk stress scenario creation for use in risk management stress testing.
We think cloud adoption will be an integral part in banks’ technology strategies as they seek to contain costs without compromising on quality. Cloud is particularly appealing for computationally intensive tasks and therefore the Intelligent Cloud BURST model has great potential for adoption in risk management. Cloud adoption is no cakewalk and particularly data privacy and security concerns will be paramount; this offering's flexibility to use the hybrid model should help in that regard as banks can run sensitive jobs on their in-premise clusters while benefiting from the public cloud for the rest.
Advanced analytical techniques are becoming essential in dealing with large datasets, and artificial intelligence and machine learning powered applications such as the TCS Intelligent Risk Scenario Creation offering will play an important role in making risk management more data driven, automated, free of human biases and errors. Model governance issues and interpretability of results can at times be challenging with these advanced techniques; banks and regulators are undergoing an educational journey and the fact that some regulators are using these techniques themselves should ease the concerns and accelerate their adoption.