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Singapore—27 March, 2019
Less than a third of banking executives in Asia Pacific (APAC) are equipped to handle the changing regulatory landscape compared to 46 percent of their peers in North America and Europe, according to a new research developed by Asia Risk and Oracle. The survey reveals that banks in APAC are behind their counterparts in modernizing their finance and risk processes and their use of data.
“Using data and innovation to drive business insights” examines more than 150 banking Chief Financial Officers (CFO), Chief Risk Officers (CRO) and other executives in key data roles and examines the state of integrated finance and how banks use data for business insights and to react to rapid changes in the regulatory environment.
However, the survey also indicates there is tremendous opportunity for forward-looking APAC banks to use data to turn their finance and risk functions into key drivers of added value and competitive advantage.
“For banks, the ability to see, know and balance the way they are performing and complying with regulations is mission-critical to their current operations and to every single decision and action they take to move forward. Our survey highlights how Asia Pacific banks are struggling to overcome the challenges with cost, risk and finance, regulations and the complexity of managing data,” said Sonny Singh, Senior Vice President and General Manager, Oracle Financial Services.
The survey highlights if banks are aligned to the right operating model, technology such as cloud computing, artificial intelligence, machine-learning and robotic process automation can help deliver a step-change in efficiency. Technology can transform many of the manual processes banks rely on today, particularly those related to meeting regulatory requests and gaining useful data insights to meet business objectives.
“The presence of a single data source for risk, finance and accounting enables banks to perform timely analysis and reporting based on current and future scenarios,” said Stuart Houston, Banking Innovation Advisor, Agile Finance and Risk, Oracle. “This could bring significant enhancement of current reporting, allowing financial institutions to concurrently perform risk and financial calculations for financial, management, and regulatory reporting from a single, unified source.”
Survey results show CFOs and CROs seek strong ties between digital transformation efforts and delivering the right detail at the right frequency with the right governance and control to meet regulatory requirements. In order to meet complex regulatory requirements banks need an overall data strategy and to incorporate leading technologies to better manipulate the data in a transparent and controlled manner.
”Today, integrated finance and risk involves a fair degree of intervention at the human level; there has to be quite a bit of advancement to enable it to innovate and take advantage of the rapid strides in digital technology,” said Madhivanan Balakrishnan, Chief Technology and Digital Officer, ICICI Bank.
While regulation is a burden, it also presents finance and risk teams with the opportunity to improve productivity, turning a cost drain into a potential profit centre by allowing more time to focus on higher value strategic activity.
As complex regulatory requirements continue it will be more important than ever for banks to invest in the right risk mitigation tools to meet complex reporting needs and improve data collaboration. Respondents are equally challenged with finding and retaining skilled staff. There is widespread belief that successful adoption of cognitive technology will be needed to overcome this, and to help meet growing demands to deliver regulatory, statutory and management reporting with complete transparency.
An executive from a large bank said few banks have a system that can easily and automatically generate needed reports for regulators. To address this challenge banks rely more and more on manual intervention, when in fact “what’s needed is a system where a regulation implemented today can be put into effect tomorrow.”
This quantitative survey of banking executives and follow-up interviews took place between November 2018 and January 2019. To access the full survey “Using data and innovation to drive business insights” please visit: http://ora.cl/c8FZ4
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Asia Risk is the only publication dedicated to meeting the information needs of risk management and derivatives professionals in the Asia-Pacific region.