executive vice president, SunGard’s wealth management business

Preparing for the wave of regulatory change and risk initiatives

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Risk and regulatory compliance can impact nearly every operational process and technology platform in banks, brokerage and trust firms. Within the coming years, financial services institutions will face a multitude of regulatory and accounting changes. At the same time, they will need to control systemic, counterparty and financial risk, and increase efficiencies and service.

Regulatory Reform
Compliance officers must keep up to date on regulations and provide quick responses to regulatory requirements. In addition to the Dodd-Frank Act, other regulatory mandates, including cost basis reporting, Basel III, FASB 157, and IFRS accounting standards, will continue to place enormous stress on financial services institutions to remain in compliance. With constantly changing regulations, more stringent auditing and increasing fines, many organizations are focusing on best practices for controls and governance, client and account administration, portfolio transactions administration, discovery and compliance analytics.

Risk Management & Business Efficiency
In a post-crisis industry, bank, trust and brokerage organizations must manage the impact of counterparty risk such as credit, trading and settlement risk, as well as the effect of portfolio valuation risk around regulatory capital, fees, exposure, financing and credit. These firms are also looking to eliminate processing errors and inefficiencies in order to reduce cost and increase productivity. By assessing business process management, risk management, reporting and compliance programs and technology, firms will be able to address shortfalls and improve efficiencies and service while reducing risk.

Data Management
Financial reform and risk management initiatives also will generate many new opportunities and challenges in the management of cross-platform, aggregate information. Increasingly, data points and metrics will be needed on-demand on a real-time basis to respond to queries from regulators, management and clients. Data management expertise is needed at the center of risk and compliance programs and infrastructure to help firms acquire, consolidate, segregate and access relevant data quickly in the format they desire, to provide access to business intelligence, operational and management reporting, and research.

Is your organization taking steps now to assess your control and governance processes, data and technology infrastructure in order to prepare for change? What are the main challenges you face in achieving progress, or simply getting started?

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