62% of APAC Banks Forecast Rising Technology Budgets for Risk Management; Credit Analytics, Enterprise Data Management to Dominate Spend: IDC Financial Insights
19 Feb 2013
Singapore and Hong Kong, February 19, 2013 – 62% of Asia/Pacific banks expect rising technology budgets for risk management, with more than a third of risk professionals projecting at least a 7% increment in spending in 2013 and only a negligible 2.7% expecting weaker risk budgets in 2013 (See Figure 1). These are some of the highlights of a recent IDC Financial Insights survey polling 40 banking Chief Risk Officers (CROs) and their deputies from across 11 Asia/Pacific nations.
Figure 1: Investment Growth in Risk Management Solution, 2013
Q. Our institution's capex and opex on risk management implementation for 2013 will grow by:
Source: IDC Financial Insights' CRO Survey, January 2013
More insights are revealed in the report, "Business Strategy: Asia/Pacific CRO Survey — Risk Management in the "New Normal" Environment" (Doc # FIN239279, February 2013), which sheds light on the organizations' investment considerations and processes instituted for financial and enterprise risk management, and opinions on the role of risk vendors. This survey document also identifies respondents' top enterprise risk initiatives for 2013 and presents executives at banks an opportunity to benchmark their risk management investments and strategies against those of fellow peers at an aggregate level.
"Changing global dynamics call for executives to astutely manage their risk profiles to ensure that their financial institutions not only survive but thrive in this ‘new normal’ environment - an environment where bankers have to deal with a climate of protracted slow growth and hyper competition. With various forces converging to push risk management into the consciousness of senior bankers across Asia/Pacific, we wanted to shed light on core risk initiatives and the associated business drivers," remarks Li-May Chew, associate research director, Asia/Pacific Financial Advisory Service, IDC Financial Insights.
She adds "Our findings reveal that while capital remains precious, IT and risk offices at financial institutions are cognizant of the need to establish a fine balance between driving business strategies and enhancing risk management controls.”
According to Chew, banks in Asia/Pacific are investing on the following technologies, in order of importance:
- credit analytics
- enterprise data management
- enterprise risk dashboards and reporting
“They are also investing in skilled risk management staff, which is becoming a rare commodity in Asia/Pacific these days, since all the tools are irrelevant without the right people to utilize and manage them."
The survey further points to a surprisingly high 77.2% of respondents agreeing that risk management vendors could possibly (though not necessarily) provide a greater level of risk analytic ability than could be found internally and, as such, are increasingly open to outsourcing to risk management specialists.
Nonetheless, regional banks are not transitioning toward the utilization of cloud-based risk solutions yet. While this trend is increasingly prevalent in other regions, only 30.8% of the surveyed are sufficiently comfortable to even consider this possibility at the present moment, citing data privacy and security regulations as core inhibitors.
"As banks across Asia/Pacific scramble to remain ahead of the risk management curve, plug gaps within their risk management framework, and exploit the disruptive third platform technologies of Big Data and analytics, cloud computing, social business, and mobility, 2013 will witness their CROs continuing to elevate risk management to a high strategic priority internally. Risk executives will further engage in new dialogues with the Chief Investment Officers to ensure that risk is integrated with all business technology decisions, seek out new tools for risk management to cope with the ‘new normal’ environment, and invest in programs to ensure that risk management skills, code of ethics, and compliance obligations are developed and understood across all strata of the institution."
For more information about this report, "Business Strategy: Asia/Pacific CRO Survey — Risk Management in the "New Normal" Environment", (Doc # FIN239279, February 2013), please contact Madhura Moulik at +91 80 6699 1090 or firstname.lastname@example.org. To set up an interview with Li-May Chew, contact Emily Chia at email@example.com.
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About IDC Financial Insights
IDC Financial Insights assists financial service businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the banking, insurance, and securities and investments industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit www.idc-fi.com, email firstname.lastname@example.org, or call 508-620-5533. Visit the IDC Financial Insights Community at http://idc-insights-community.com/financial.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 49 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.
ContactFor more information, contact:
Li-May Chew, CFA