Need for Effective Exposure Management

Challenging market dynamics are forcing banks to assess their exposure and the impact on the P&L. To be able to realistically gauge the magnitude of exposure, an organization will have to move beyond siloed limits and collateral management that exists at an application level. Today, banks do not have an enterprise wide view of the exposure, centrally, owing to their diverse IT and Application landscape. Each system has its own set of workflows for maintaining and managing limits, while collateral management is done in a different system. The larger players have invested in warehouse for risk and finance along with departmental solutions. They have established an effective mechanism of rolling up the information from the silos but the control actions, from a risk management committee cannot be effectively used as there is no plumbing for inheriting the decisions into the transaction systems. Centralized limits and collateral management solution address such challenges by offering exposure information at one place.