New Risk Management Regulations and Reporting Requires Enhanced IT Tools

Following the global regulatory changes, the industry in general has been faced with the challenge to respond to this new environ- ment (in terms of analyzing data, reporting etc.) and technology providers have been rolling out new products in response. For ex-ample, the Basel III regulations on capital have convinced many market players to outsource some of their IT infrastructure to spe-cialized vendors. Asked about these developments, SunGard CTO Steven Silberstein commented: “For speed of implementa- tion, cost and simplicity, we are seeing more clients shifting towards our hosted solutions, leveraging our build-in cloud SOA (Service Oriented Architecture) solutions, and this trend is well on its way in Asia, now our fastest growing region. The regulatory complexi-ties have also made our risk management solutions, such as Adaptiv, very attractive to our clients.“ Looking deeper into the details, the challenge brought by those regulatory changes lies in the ability for systems to process more and more data, over an increasing number of complex scenarios, while shortening the time delays in order to recognize risks in the most accurate manner. From Silberstein's point of view, coping with this technological challenge requires ISVs to move toward advanced technologies such as HPC(High-Performance Computing) or GPU(Graphical Process Unit)-based computing method.


Even though Japan is still seen as a high-tech country, the trading industry has been lagging behind other major financial centers in terms of technology. The reasons for this are multiple, but the traditional approach of managing IT environments through inter- mediates, such as System Integrators, as well as the deeply-entrenched closed legacy systems may be obstacles to the deployment of packaged solutions interfacing with existing systems in place. Moreover, approaching risk comprehensively (be it credit risk, counter-party risk or market risk) requires financial institutions to think and work transversally, often on a global scale, much beyond the traditional business silos. This has usually come as a challenge for certain Japanese organizations to adjust their ap-proaches toward a comprehensive view of risk. However, this is all changing: the Japanese financial industry is now moving towards a revamping and upgrading of their various IT solutions. Mr. Silberstein noted that “as the market evolves, the technologi- cal envi-ronment is maturing in Japan.“