The central tenet of such a framework is an enterprise view of risk. Traditionally, teams for risk management have operated in disparate silos, which impedes collaboration, undermines their status in the organisational hierarchy and critically obscures the true risk profile of the bank. This siloed approach also extends to system development, leading to a plethora of systems within each risk department that can execute specific tasks efficiently but cannot communicate seamlessly with each other. As a result, risk managers in individual departments can gain a false sense of security that belies a range of hazards that can afflict the business. Mitigating this situation requires an integrated infrastructure and data warehouses that provide services to all departments from a central point.
Even when this has been achieved, however, banks also need to ensure that prompt action can be taken whenever threats materialise.
Towards this end, an integrated infrastructure alone is not sufficient; a proper mechanism for conducting up-to-date risk analysis should be instituted, the results of which should be available at all times to senior management. This white paper discusses how this may be achieved by interactive risk dashboards tailored to the individual requirements of each user, which allow on-demand risk analysis.