Optimizing capital across the business with smarter risk analytics
This week we’re in New York City for IBM’s Smarter Analytics Leadership Summit where we are gathering with industry leaders to share insights on how they are working with IBM to leverage the explosion in big data and power intelligence to drive transformation in their organizations.
Nowhere is this powerful concept more lucrative than in risk and financial services, as banks around the world struggle with increased competition and regulation, and are looking to optimize capital deployment across business units to increase profits and improve return on capital.
The simple fact is this: The most visionary organizations are evaluating the regulatory requirements ahead of them, and they are embracing opportunity by investing in solutions that enable them to do better – to enable risk-aware decision making and to improve profitability.
But how do you truly optimize capital across the enterprise? It requires a multi-layered approach. At the strategic level, the bank must be sure that it has sufficient capital at any given time to cover the firm’s obligations, even under stress scenarios, and to perform to the best of its ability. At the operational level, the bank must seek to allocate capital more efficiently across lines of business. And last, but certainly not least, capital must be optimized as business is conducted in front office operations.
One such example, as we are learning about this week at the Smarter Analytics Leadership Summit, is at Scotiabank Global Banking and Markets. Scotiabank is working with IBM Risk Analytics to optimize their business at the point of impact – using instrumented, intelligent, real-time risk systems to support their traders in everyday transactional decision making to yield risk-adjusted pricing. That’s capital optimization.