Risk ManagementRisk always exists in any commercial endeavor. What separates successful companies from the rest is that they do two things right: they manage risk properly and quickly adapt to ever-changing markets. The payoffs for managing risk properly are huge, which is why more companies are increasingly emphasizing risk management. According to the latest study by Accenture in 2013, 98% of 450 companies in 8 industry groups, from 3 major geographic regions placed a high priority on risk management.[1] Since the inception of Dodd-Frank in 2010 and increased reporting requirements, risk management has shifted towards promoting transparency, complying with regulations, and unlocking the data contained within data.[2] Enterprise data management (EDM) systems can make these shifts more seamless, streamlining the workflow processes while mitigating multiple types of risks. Now, let’s dive into the top recent trends in this area.

 

#1: Compliance with Regulations

The weak regulations that governed banks and financial institutions were among the essential contributing factors to the North American financial meltdown in 2008. Governments have since tightened regulations throughout the financial world to prevent a similar mishap. Now, 99% of companies surveyed in Accenture’s Risk Management Research rated ”compliance with regulations” as either an important or critical business concern.[3] Dodd-Frank and MiFID II have made the financial world a lot more transparent by ensuring that more data related to trades on OTC markets is made public. Both Dodd-Frank and MiFID II are aimed at derivatives which are hard to regulate as they are very complex, multi-party, and, often, frequently traded. As a result of all the regulations introduced into the market, handling multi-faceted data in a timely fashion with a minimum amount of resources has become a real challenge.[4]

When companies have to readily be able to retrieve data in a timely, accurate manner, a new risk exposes itself. ZE’s all-in-one EDM solution, ZEMA, can help mitigate this risk by automating data retrieval, ensuring that precious information is always collected on time and stored in a secure location. To comply with regulations and alleviate data-related risks, companies should delegate their data security and compliance processes to the award-winning ZEMA solution.

#2: Transparency & Quality                                                           

Companies are also becoming more transparent and monitoring data usage levels to mitigate risk on their own end. The Accenture survey shows that 62% of the companies surveyed expect legal risks to change rather drastically in the next two years.[5] This would put more emphasis on transparency than before for companies wishing to operate successfully by adapting to ever-changing market dynamics. It is no surprise that transparency in essential, but this becomes more challenging with the complexity and volume of data companies are dealing with nowadays. Also, there is a lot of risk undertaken depending on the magnitude of an organization’s decisions based on the underlying data – a wrong data point can cost a company millions. A reliable EDM solution that enhances transparency will help organizations not only comply with government regulations, but feel at ease regarding their own auditability.

ZEMA clients vary in size from small hedge funds to Fortune 500 companies. ZEMA provides clients with the ability to monitor when a data point was changed, why it was changed, and who changed it. This way, companies can closely monitor data usage to cut down on any inefficiency. Ultimately, monitoring data usage and improving transparency can prove very beneficial at minimizing both internal and external risks.

#3: Unleashing Data Potential

To further reduce risk, organizations are increasingly focused on unlocking the maximum amount of information hidden in their data. In 2014, companies are not only analyzing data in downstream systems, but using software that provides advanced data visualization. ZEMA’s analytics solution offers powerful analytic and visualization tools for discovering relationships and trends in data. In addition, it automates the collection of data in different formats and granularities, equipping traders to spend more time analyzing data than gathering it.

Data visualization is often used to help lessen a wide variety of risks, from budgeting and forecasting to investment decisions and strategic planning. ZEMA analytics provides the ability to create and view dashboards consisting of ZEMA analytics, news feeds, live weather maps, and analytics built in other programs like Spotfire. ZEMA dashboards can then be projected onto screens throughout an organization to give many employees an up-to-date picture of markets.

ZEMA for Risk Managers

Since the introduction of Dodd-Frank in 2010, companies are moving towards increased transparency, while relying on a wealth of market data. ZEMA releases organizations from dependence on ad-hoc, spreadsheet-based analysis by providing a proven end-to-end data management solution that is transparent, flexible, and dynamic. To learn more about ZEMA and how it can help risk managers stay ahead of the curve, book a complimentary demo with us!

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[1] “Risk Management for an Era of Greater Uncertainty,” Accenture, 2013, accessed August 1, 2014. http://www.accenture.com/Microsites/risk-management-research/2013/Pages/home.aspx

[2] LaBarre, Olivia, “Big Data, Transparency among Top Data Management Trends, According to the EDM Council,” InformationWeek, February 2, 2012, accessed August 1, 2014. http://www.banktech.com/management-strategies/big-data-transparency-among-top-data-management-trends-according-to-the-edm-council/d/d-id/1295112?

[3] “Risk Management for an Era of Greater Uncertainty,” Accenture.

[4] “A Case for Enterprise Data Management in Capital Markets,” CapGemini Consulting, 2012, accessed August 1, 2014. http://www.capgemini.com/resource-file-access/resource/pdf/A_Case_for_Enterprise_Data_Management_for_Capital_Markets

[5] “Risk Management for an Era of Greater Uncertainty,” Accenture.