Strategic Innovations in Risk Management (Part 3): Sniffing Out the Trail to Game Changers
Abstract
The shift in sources of value for different market players in risk management is already resulting in discernible implications for winning client propositions and business models. Operational innovations, strategic business capabilities, and new revenue models will separate the winners from the losers.
In the third installment in a series, Strategic Innovations in Risk Management: Sniffing Out the Trail to Game Changers, Celent highlights examples and recommends operational innovations and business capabilities where the possibilities of technology-enabled innovation can lead to significant operational enablement and more profound market disruptions.
Firms are compelled to innovate in a focused and intelligent manner, develop new client propositions, remove overcapacity in business and technology operations, and, at the same time, improve the efficacy of risk and compliance management capabilities. The market environment will drive firms to examine how they operate, manage costs, and achieve differentiation.
“The playbook is changing, but not all new innovations and emerging operating models will survive. As market forces and competitive pressures exert their influence, firms that lack scale and specialization will need to explore ways to maintain parity with ‘at scale’ firms,” says Cubillas Ding, Celent Research Director and author of the report.
“Winning firms will excel by aligning different operational delivery models to access and manage stable sources of liquidity, and effectively integrating infrastructure solutions with risk intermediation activities. This will help them realize an optimal collateral mix, reduce financing costs, manage counterparty credit exposures, and drive vital competitive advantage,” he adds.
This report provides insights and case studies of operational innovations. Strategic business capabilities and new revenue models in the report are based on what Celent considers emerging best practices from experiences in various financial firms, such as BNP Paribas, Citi, DTCC, Euroclear, Goldman Sachs, MFS Investment Management, Morgan Stanley, UBS Investment Bank, Riskalyze, and ZestFinance.