Industry Trends & Opportunities

Trends

GRC - Risk

Financial Risk

• Banks are racing to meet regulatory timelines
• Market Risk – FRTB
• Credit Risk - Basel3 Reforms
  • Minimum haircut floors for SFTs
  • Securitizations of non-performing loans
  • Disclosures on Sovereign exposures, Asset encumbrance, comparative on Standardized vs Modelled RWA

Non-Financial Risk

• Cybersecurity risk mitigation – a key task for CIOs
• Focus on Explainable AI

Climate Risk

• BCBS’s Principles for the effective management and supervision of climate-related financial risks

GRC - Compliance

• Rising volume of work in financial and non-financial risk management and reporting.
• Regulators’ demand for near-real-time evaluation of risks & reporting
• ESG - Concerted efforts by major standards authorities to converge and simplify ESG reporting.

Investment Management (Hedge Funds + Wealth Managers + Private Capital)

• Greatest Wealth transfer to younger generation over the next two decades
• Effective Omnichannel Management – Services standardized across all channels

Implications

GRC - Risk

• Need for real-time risk reporting (T+0 / t+1)
  • Matured data pipelines with accurate, complete and timely data (BCBS guidelines)
  • F2B Data Lineage capability
• Overarching NFR policy guidelines instead of handling NFR in silos within each risk stream ( Operational Risk, IT risk, Conduct Risk etc.)
• Integration and digitalization of nonfinancial risk controls, monitoring and reporting
• Unified security management across cloud & on-premise data centers
• ERM & risk appetite framework for sustainability risk, leading to Climate Risk Transition strategy in all LOBs

IGRC - Compliance

• Increased compliance effort
  • Fragmentation of controls across LOBs, disconnected systems, and changing legal requirements
• Divergent ESG reporting standards shall defer efforts to E2E automate the operation workflows.

Investment Management (Hedge Funds + Wealth Managers + Private Capital)

• Hyper-Personalized Customer solutions to engage with young inheritors
• Race towards digital transformation to acquire more market share
• Banks partnering with non-financial enterprises to create new product, services and distribution opportunities. e.g. : AI-Smart Beta ETFs, Tokenization of less liquid assets.

Way Forward (Opportunities)

GRC - Risk

• Build stronger Data governance capabilities and practice
• Develop a data-driven strategic tools and solutions for performant reporting & analytics
• AI risk mitigation – collectively AI privacy, security and risk management for improved AI business outcomes
• Augment tools and capabilities to identify and assess physical and transition risks as part of risk identification
• Review “move to cloud” initiatives through the lens of operational resilience
• Integrating LCT ( Low Carbon Transition) workflows into existing front office applications, for measurement, monitoring, & reporting

GRC - Compliance

• Creation of horizontal value streams, serving various compliance vertical functions, to improve efficiencies – common technology stack (API / services-oriented architectures) & data pipelines
• Application of Blockchain, Low code / No code frameworks, where possible.
• Embedding ESG workflows and data collations into E2E Enterprise architecture.

Investment Management (Hedge Funds + Wealth Managers + Private Capital)

• Customer oriented Digitization characterized by application of new IT developments like social media, robo-advisors, cloud computing (vertical scaling).
• Innovative solutions for emerging business use cases (e.g., Open Banking)