APAC banks lag global peers in modernizing risk processes and data use

Less than a third of banking executives in Asia Pacific (APAC) are equipped to handle the changing regulatory landscape compared to 46% of their peers in North America and Europe, according to new research developed by Asia Risk and Oracle. The survey reveals that banks in APAC are behind their counterparts in modernizing their finance and risk processes and their use of data.

The report examines more than 150 banking CFOs, CROs and other executives in key data roles and examines the state of integrated finance and how banks use data for business insights and to react to rapid changes in the regulatory environment.

“Our survey highlights how Asia Pacific banks are struggling to overcome the challenges with cost, risk and finance, regulations and the complexity of managing data,” said Sonny Singh, SVP and GM at Oracle Financial Services, in a statement.

Operational silos and poor communication between finance and risk functions and between different divisions within the bank are hampering performance and the ability to use data to drive profitability, with 51% of respondents saying that a single view of data to improve predictive power for finance and risk is their greatest priority.

The survey highlights that the right operating model can use technology such as cloud computing, artificial intelligence, machine learning and robotic process automation. Technology can be put to task on many manual processes banks rely on today, particularly those related to meeting regulatory requests and gaining useful data insights to meet business objectives.

“The presence of a single data source for risk, finance and accounting enables banks to perform timely analysis and reporting based on current and future scenarios,” said Stuart Houston, banking innovation advisor in the Agile Finance and Risk unit at Oracle, in a statement. “This could bring significant enhancement of current reporting, allowing financial institutions to concurrently perform risk and financial calculations for financial, management, and regulatory reporting from a single, unified source.”

In order to meet complex regulatory requirements banks need an overall data strategy and to incorporate leading technologies to better manipulate the data in a transparent and controlled manner.

“Today, integrated finance and risk involves a fair degree of intervention at the human level; there has to be quite a bit of advancement to enable it to innovate and take advantage of the rapid strides in digital technology,” said Madhivanan Balakrishnan, chief technology and digital officer, ICICI Bank, in a statement.

APAC vs. US and EMEA

  • 70% of respondents rate better organizational alignment as critical or very important
  • 20% of APAC respondents say they are siloed, compared with only 2% among banking executives surveyed in US and Europe.
  • 25% of banks with more than $500 billion in assets say they are fully aligned. For smaller banks, 50% believe they have full alignment between the risk and finance functions.
  • One-third (34%) of executives in APAC see the opportunity for improved insight and clarity compared with over half (52%) in more developed markets.

Read the full report

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