2010-07-20

By Editor, CIR

Incomplete, inconsistent data creates lack of confidence across Europe’s financial institutions. So says Oracle, whose report published today reveals senior business and IT managers across Europe’s financial services institutions believe there needs to be more emphasis placed on risk management when it comes to decision-making and performance management.

The European Confidence Report also highlights significant issues with the availability of risk and performance related data, as well as the readiness of the IT systems to meet increasing regulatory demands.

Commenting on the findings, Nazif Mohammed, vice-president EMEA, Financial Services, Oracle said, “Financial institutions must integrate risk and finance to provide a solid foundation for the future. This research highlights that there is still a long way for financial institutions to go to confidently manage their information. Outdated or irrelevant data hinders effective decision-making and performance. Without complete visibility into the business, financial institutions will continue to be unable to react to market conditions as they occur.”

Senthil Kumar, vice-president, Oracle Financial Services Global Business Unit, added, “The next set of guidelines from global regulators, Basel III, addresses liquidity risk, stress testing, loan loss and capital forecasting – all key to the success of a financial institution. The regulation will require financial institutions to further strengthen and unify their risk management and finance processes to avoid repeating the same mistakes that we have seen in the last few years. Oracle's ability to integrate these processes through a unified platform is rapidly gaining worldwide recognition as a transformational best practice. Our customers are able to optimise their capital adequacy needs in order to enable key processes, like risk-based pricing and risk-adjusted performance, to increase their overall competitiveness.”

Key findings

•Financial institutions are not leveraging integrated risk information in decision-making:
-41% of financial institutions surveyed do not currently assess risk and performance together and only 18% of respondents reported an ability to deliver performance and risk information to the business in real-time.

•Existing IT systems are unable to deliver what the business needs to react immediately to external events:
-Only 26% of respondents are confident that their existing IT system is capable of using stored data to provide a full risk analysis across all business units.
-Almost two-thirds (64%) do not have confidence that IT is able to provide a 360-degree view of the entire business. For example only 32% of the participating banks claimed they had access to vital data like counterparty information and 25% of the participating UK banks couldn’t even produce this information.

•Financial institutions do not realise the impact risk can have on overall performance:
-The vast majority (85%) of respondents from the banking sector do not have performance management systems completely integrated with risk analysis systems.
-Additionally, almost half of all participating banks were not confident of the accuracy of their risk and counterparty related data.

The research, conducted by Vanson Bourne, surveyed 228 financial services professionals and 222 IT professionals in financial institutions across Europe.
For full findings and research data, see http://www.oraclefscentral.com/resources