Better risk management for improved business decision making

An integrated approach to risk management is crucial for enabling organisations to consolidate exposures, measure risk and perform stress tests across all lines of business.

The recent turbulence in financial markets has made risk management an increasingly critical part of the decision-making process in financial institutions.

An integrated approach to risk management is crucial for enabling organisations to consolidate exposures, measure risk and perform stress tests across all lines of business. However, the ability to measure risk comprehensively is not sufficient. A significant step is the execution of policies based on comprehensive risk measurements of the business process. This includes risk methodologies tied to economic capital management, pricing and performance measurement – ensuring that risk is integrated and consistent with business strategies.

The necessity of an integrated data infrastructure to support methodology capabilities and consistent policies is well-understood. However, its actual implementation is far from trivial. The situation is further complicated by the fact that efficient policies require an integrated data foundation and comprehensive methodology capabilities as a prerequisite for establishing effective policies.

This is an extract from a White Paper written by SAS’s Jimmy Skoglund, manager of risk methodology, and Austin Trippensee, product manager, risk management for banking. SAS is a global provider of business analytics software and services.

For the full White Paper, please click on the link below:

http://www.sas.com/resources/whitepaper/wp_13428.pdf

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