Firms should take steps to devise an overarching enterprise-wide risk framework linked to risk appetite, systems needs and required management processes, plus a road map to drive the same.
12. Develop ERM systems and controls, and reinforce workflow management, management information and data.
Over the last year, many traditional and alternative asset managers turned toward upgrading their systems infrastructure, their underlying data and their monitoring tools to derive adequate data for back testing and to support risk management decisions.
Firms should continue to design data taxonomies (e.g., a firm-wide consistent nomenclature behind specifying unique instrument or legal entity identifiers) to develop master “golden copy” records and dashboard MI capable of tracking KPIs or KCIs.
Organizations should digitize documentation to support the desire for look-through and on-demand retrieval, strengthen ring-fencing against fraud and integrate systems, controls and databases (particularly desktop systems covering market or investment risk) more effectively with the rest of the enterprise.
Firms should also take steps to devise an overarching enterprise-wide risk framework linked to risk appetite, systems needs and required management processes, plus a road map to drive the same.
This is particularly relevant for firms affected by multi-stage regulations (regulations with multiple impacts at different stages of the timetable), such as Basel III, Solvency II, Dodd-Frank Act or the FATCA.