Operational Risk Management: Three, Two, One ... Liftoff?
AbstractLondon, United Kingdom July 17, 2006
Operational Risk Management: Ready to Leave the Launch Pad?
Celent predicts the operational risk and compliance market will grow to $1.16 billon by 2009.
Risk-driven regulatory initiatives, like Basel II and the Sarbanes-Oxley Act, have significant momentum and are giving rise to new operational risk management practices. By nature, operational risk issues are broad and diverse, affecting such areas as security, fraud, anti-money laundering efforts, data/document management, financial reporting, compliance management, straight-through processing, outsourcing, disaster recovery, and business continuity.
With regulatory requirements as fragmented as a map of Europe, institutions with larger footprints are forced to formulate a more integrated response and to cater to different operational risk and compliance requirement "flavours." All these factors are changing the face of the market and creating uncertainties as well as opportunities for institutions and vendors alike.
In two related reports, Operational Risk Management: Three, Two, One... Liftoff? and Operational Risk Management: Are Vendors Ready To Launch?, Celent assesses industry dynamics, the progress of efforts, investment priorities, and solution strategies and makes recommendations for operational risk and compliance management.
"The current state of affairs, where multiple flavours for operational risk initiatives exist, is beginning to change. Firms are increasingly looking to 'rationalize' regulatory initiatives across multiple jurisdictions. Practices adopted to comply with one regulation are 'cross-pollinating' to fit another regulation," states Cubillas Ding, Celent analyst and author of the reports.
These reports examine the state of the market, predict which operational risk vendors are here to stay, and assess nine vendors and their solutions. The vendors included are Algorithmics, Ci3, Financial Objects (previously Raft), FRS, i-flex / Reveleus, Methodware, OpenPages, Paisley Consulting, and SAS.
This report is 29 pages long and contains 13 figures and two tables. A table of contents is available online.
Operational Risk Management: Are Vendors Ready to Launch? is 59 pages long and contains 15 figures and 15 tables. A table of contents is available online.
Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].
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Table of Contents
|Vulnerabilities Across Business Lines||8|
|Operational Risk & Governance Practices in the Spotlight||9|
|Risk Management Accountability||10|
|Governance Structures Have Evolved||11|
|Tighter Collaboration Still Required Among Risk, Compliance, and Audit||12|
|Technology and Functional Imperatives||15|
|IT Spending by Geography||21|
|IT Spending by Source||21|
|Expenditure by Institution||22|
|Objectivity and Methodology||27|