16/07/2010

By Graham Buck

A survey of risk managers suggests that less than one in three feel that business executives are up to date on technology.

The study, Risk Management Systems in the Aftermath of the Financial Crisis, was carried out by the Global Association of Risk Professionals (GARP) on behalf of software group Sybase and is based on a survey sent to more than 5,000 professional risk managers in Germany and the UK.

Only 32% of those responding felt company executives had kept up with new technology, while 57% said they only update their risk management database overnight. The survey also found that 28% who ran complex analysis for trades in real-time and a further 32% did the analysis intraday.

For larger problems, such as portfolio and counterparty risk or global positions, most firms relied on overnight processing. Relatively few managed this in real-time, while approximately 20% ran their portfolios, counterparty and global position calculations weekly.

Other findings from respondents were that 24% complained of having to deal with too many different databases, 15% said their databases were too slow and 11% regarded new features and analytics as either too time consuming or expensive.

“Most risk management organisations lag two to three years behind in taking advantage of the latest technology – on both the business and IT sides,” said Stuart Grant, EMEA business development manager for financial services at Sybase. “By doing this, these firms miss out on the associated cost and efficiency benefits that come with better integrated systems.

“By integrating systems, risk managers can reduce reconciliation efforts, cut expenses and, most importantly, operate from a single data source, leading to significant savings in data storage costs. Risk managers don’t want constant real-time reporting; rather what they need is on demand access to information in real-time.

Commenting on the survey finding that 63% of firms are now willing to increase investment in risk management technology, he added: “Risk management has always struggled to achieve funding although regulators may yet demand greater investment in risk management. With these factors in mind, it’s encouraging that investment is now a more recognised priority.”

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