The Basel II Accord was crafted in response to the estimated $12 billion lost in the financial markets since 1992—a figure attributed to poor risk management practices and fraud. While financial services companies will ultimately benefit from the implementation of the Basel II Accord’s risk management guidelines, the immediate task is a daunting one: to collect and analyze two or more years’ worth of business data before the Basel II Accord takes effect in 2007. As a result, many financial services companies will have to implement sweeping changes to their corporate data infrastructure to ensure their ability to comply. |
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The accord mandates standardized measurements of credit, market, and operational risk among internationally active financial companies. However, within those guidelines are different levels of Basel II compliance which allow financial service companies to pursue advanced risk management practices that could potentially free up capital for investment. As a result, the Basel II Accord presents tangible business benefits for financial companies beyond improved risk management practices. And astute companies have already noted that the data infrastructure needed to comply with the Basel II risk management guidelines could also be leveraged for International Accounting Standards (IAS) compliance, as well as business applications, such as customer profitability analysis.
Basel II compliance highlights the importance of understanding the complexities associated with integrating, processing, and presenting information needed to comply with new standards. A company's information infrastructure is commonly comprised of many different types of data sources (e.g., databases, legacy, and flat files)—all of which speak a different language. IT organizations must also have the ability to gather data from disparate systems, provide visibility into that data, and monitor and respond as changes occur.
How our Solution can help your business with Basel II compliance:
• Allows you to inventory your environment, identify, review, and assess risks
• Helps your organization meet requirements to create a risk structure and calculate the capital allocated to operating risk
• Allows you to inventory operating risk events stemming from Internet fraud, bank security, products, lawsuits, natural disasters, among other sources
• Ensures an accurate statistical assessment and allows you to develop the best operational risk estimate
• Can be adapted to small and large scale environments
• Automates processes that provide for continuous monitoring and generates reports measuring organizational compliance
• Provides detailed recommendations to mitigate both risks and security gaps
For more details please contact us
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