Using Technology To Improve Credit Risk Oversight - Market Research Reports On Aarkstore Enterprise

While governments and regulatory bodies are trying to revive their economies and

are pressuring banks to increase their lending, the industry's ability to manage credit risk remains weak. This situation is boosting a re-evaluation of credit risk management processes and underlying technologies, in order to minimize the exposure to current and future credit losses.

Scope

*The report examines the growing exposure to credit losses that drive the adoption of credit risk oversight strategies and technologies.

*It provides insight into the integration of credit risk with other risks and the blending of business processes and technologies.

*The recommendations provide the necessary intelligence for enterprises to formulate their technology strategy and for vendors to align their offerings

Highlights

Bankers should focus on stronger governance in order to establish efficient measurement systems, and strengthen the credit culture within an organization. Although in many cases banks already have credit risk management systems in place, they were, for the most part, bypassed or ignored with a false confidence in securitization.

The focus on oversight demands that banks provide a more comprehensive view of their credit risk exposure. One of the main needs is to record and monitor risks, so that a bank is always completely aware of its overall credit risk exposure. Therefore, banking organizations need to implement much more advanced systems to manage risks and capital.

Reasons to Purchase

*Gain insight into the challenges faced by retail banks seeking to improve their credit risk oversight practice.

*Gauge how market conditions are shaping the development trajectory of the credit risk management discipline.

Table of Contents :

"SUMMARY 1

Impact 1

Ovum view 1

Key messages 2

Implementation of strong credit risk governance is a necessity to avoid financial failures 2

Business intelligence and analytics will be required for stronger credit risk oversight 2

Banks should focus on a framework approach when evaluating credit risk technology 2

MARKET ConTEXT: The impact of the credit crisis 3

Banks need to understand the relationship between credit and other types of risks 3

The boom-bust drama drives the failure of existing credit risk mitigation strategies 3

Securitization does not remove the need for conscientious credit risk management 4

Risks need to be managed as interconnected areas to prevent financial disasters 6

Strong credit risk governance is a necessity 6

Access to precise and reliable information enables accurate decision making and monitoring 7

business Focus: the road toward maturity 8

Underperforming organizations must revisit their credit risk processes 8

The ability to analyze risks on aggregate positions across transactional data and credit portfolios is key 8

Business intelligence and analytics will be required for stronger credit risk governance 10

The approach toward credit risk needs to mature through the implementation of enterprise-wide risk strategies 10

Credit risk must be treated as a component of a wider risk strategy 11

The reliance on quantitative models must be balanced with a qualitative approach 13

Managers should focus heavily on a more predictive approach to risk measurement 14

Credit risk should create added value for banks 16

Technology FOCUS: integration is key 17

Automation is the efficiency king 17

Banks need to automate their risk management lifecycle 17

A comprehensive and automated risk platform is the driver behind efficiency 18

Computing power is a necessity for successful credit risk implementation 20

Grid computing is an emerging trend 20

Server platforms must meet the requirements of processing-hungry credit risk applications 21

The total cost for a long-term strategy needs to be considered 21

Compliance continues to drive credit risk technology spending 21

The evaluation criteria should be based on a long-term risk management strategy 23

A bank's sourcing strategy must reflect its strategic approach to credit risk 24

Best-of-breed 24

Best-of-suite 24

It is a necessity to create a proper data foundation 25

Data quality is key 26

RECOMMENDATIONS 27

Recommendations for enterprises 27

Banks need to focus on the stronger governance of their credit risk processes 27

The 'ownership' of the credit risk technology needs to be shifted from IT to risk officers 27

Sound data management and data quality procedures need to be implemented 27

Recommendations for vendors 28

Solution providers need to focus on long-term strategy and short-term execution 28

APPENDIX 29

Ask the analyst 29

Definitions 29

Further reading 29

Methodology 30

Disclaimer 30

For more information, please visit :

http://www.aarkstore.com/reports/Using-Technology-to-Improve-Credit-Risk-Oversight-45126.html

by: Aarkstore Enterprise

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