Where Next for Risk and Compliance?

Last week, I moderated a particularly interesting webcast focusing on risk and compliance associated with risk management. All four speakers, from Streambase, SAP, RBS and Olympian, gave a lot of thought provoking contributions to the debate, particularly around methods of risk modeling and the enhanced role that technology plays in the way compliance and risk are being approached.
The audience, too, gave a number of interesting responses to the poll questions. Some of it was expected, in terms of increased spend towards compliance with regulatory mandates and a move to intra-day risk management, but all of it highlighted the acute pressures that financial services firms, on the buy or sell sides, are experiencing at the moment.
It seems that everything, eventually, is beginning to lead back to compliance. Whether it's from firm-wide damage due to fines and penalties for playing fast and loose with regulations, or through reputational damage thanks to rogue trading. The problem with the latter, of course, isn't just the initial financial hit that this practice seems to invariably result in, but the continued recycling of condemnation. UBS hasn't exactly come out of Kweku Adoboli's time on the dock smelling of roses, I think we can all agree, and SocGen hasn't done particularly well out of Jerome Kerviel either.
Time of the Technocrat
The simple fact is that compliance is no longer an institutional necessity, borne grudgingly, but an integral part of business now. Conversations I've had with people from all brackets of the industry have turned from propping up compliance functions with the bare minimum to actively, and in many cases, proactively, engaging with it through technology.
The importance of adequate surveillance, and the interest associated with inventive and novel ways of fulfilling that obligation are being underlined constantly. Just look at NICE's acquisition of RedKite, or Fidessa's recent Buy-Side Technology Award win for Sentinel for a couple of examples.
Conversations I've had with people from all brackets of the industry have turned from propping up compliance functions with the bare minimum to actively, and in many cases, proactively, engaging with it through technology.
Moreover, the enhanced use of straight-through processing, and the development of holistic risk management platforms that take an enterprise, rather than siloed, view of exposures and Chinese walls, are increasing the compliance options available. It all returns to the point of data, in the end.
We've spilled a great deal of ink in Sell-Side Technology, Buy-Side Technology, Waters, Inside Market Data and Inside Reference Data talking about data delivery and governance, and in an area where compliance is king, those conversations have never been more relevant. After all, you can have the fastest Ferrari money can buy in your garage, but as our friends and colleagues in New York have found recently, without gas it's just a very pretty object. The same goes for compliance systems; data is the most important asset a firm has. Ensuring the credibility, reliability and availability of important data is the key to ensuring good practice.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
Experts say HKEX’s plan for T+1 in 2025 is ‘sensible’
The exchange will continue providing core post-trade processing through CCASS but will engage with market participants on the service’s future as HKEX rolls out new OCP features.
‘The opaque juggernaut’: Private credit’s data deficiencies become clear
Investor demand to take advantage of the growing private credit markets is rising, despite limited data, trading mechanisms, and a lack of liquidity.
Overnight trading blocked, consolidated tapes, BlackRock’s Larry Fink, data costs, and more
The Waters Cooler: Deutsche Börse provides crypto custody, FIS has a new GenAI tool, and some M&A activity in this week’s news round-up.
Johannesburg Stock Exchange releases new order routing service to lower trading costs
The exchange collaborated with Rapid Addition for its creation.
DLT and digital contracts for market data: Has the hammer found the nail?
Waters Wrap: A new platform that a custom-made DLT underpins is coming to market. Anthony examines its merits and, surprisingly, finds a lot.
No, no, no, and no: Overnight trading fails in SIP votes
The CTA and UTP operating committees voted yesterday on proposals from US exchanges to expand their trading hours and could not reach unanimous consensus.
Bond CT hopeful Etrading unveils free tape prototype ahead of tenders
The vendor hopes to provide the long-awaited consolidated tape for bonds in the EU and the UK, demonstrating its ability to do so through ETS Connect.
Jump Trading CIO: 24/7 trading ‘inevitable’
Execs from Jump, JP Morgan, Goldman Sachs, and the DTCC say round-the-clock trading—whether five or seven days a week—is the future, but tech and data hurdles still exist.