Today's sophisticated wealth management client demands access to cutting edge risk analytics tools.
In addition, banks and wealth managers must integrate risk analytics into their investment approach as they interact with complex regulatory and compliance environments.
Competition with other banks and advisers for high net worth and affluent client assets remains intense.
In the aftermath of the global economic downturn that began in 2008, banks and advisers are challenged to preserve client capital.
They must offer tools that allow clients to understand the potential impacts of market volatility.
Those firms operating without risk analytics tools do so at their peril.
Banks and Risk Analytics Tools According to Steve Culp, Accenture's global risk management practice, banks know they must continue to invest in risk analytics tools--including qualitative and quantitative processes and tools.
A poll conducted by Accenture shows that approximately 73 percent of banks plan risk analytics investments; they plan to invest approximately 10 percent more than in previous years.
Financial modeling, data quality/sourcing and systems integration tools are in high demand by banks.
Accenture's respondents say they need sophisticated risk analytics tools to reduce costs while improving credit performance.
Technology helps the bank to identify potential nonperforming loans.
The bank's relationship managers can take earlier steps to assist counterparties suffering financial distress.
Restructuring or refinancing existing loans before they become nonperforming assets is crucial to the bank's current and future profitability.
Identifying higher risk customers and unprofitable relationships helps the bank to deploy capital for maximum return.
Risk Management Solutions: Not One-Size Fits All Most bank clients require customized risk management solutions.
Culp says that clients must commit to gaining internal expertise and resources to manage risk management tools.
Smaller banks lag in the acquisition of new risk management tools.
Poor data quality or integrity yields less than ideal data governance.
The ability to manage and harvest data requires the client to integrate analytics tools across a field of data sources.
Effective risk management tools differentiate the bank from others.
Sophisticated clients compare and contrast the resources offered by banks for their use in portfolio and asset management.
Advances in Quantitative Finance and Software Solutions In an article published by Hubbis, financial software expert and CEO Jean-Luc Freymond discussed why wealth managers should focus on risk management as a path to improved portfolio returns.
Risk management tools allow asset managers to align investment proposals with clients' financial objectives.
"Know your customer" requires the bank or wealth manager to understand the client's risk profile.
According to Freymond, "With more accurate risk measures and better-diversified asset allocations, wealth management firms can offer superior performance and safer investment proposals that will match their clients' targets in terms of wealth preservation or capital growth.
" Risk analytics tools allow managers to implement and offer both risk management and mitigation processes.
"The ability to use and demonstrate this process is extremely important in today's highly-volatile environment where we see more and more nervous clients challenge their bankers on the topic of risk mitigation," says Freymond.
Use Risk Analytics Now Financial markets show historical periods of expansion and contraction.
In today's fully globalized financial environment, banks and financial managers must consider risk management and mitigation as part of the total client value proposition.
Preparing clients for volatility requires the firm's utilization of tools and processes to assist them in achieving long-term financial goals.
In addition, banks and wealth managers must integrate risk analytics into their investment approach as they interact with complex regulatory and compliance environments.
Competition with other banks and advisers for high net worth and affluent client assets remains intense.
In the aftermath of the global economic downturn that began in 2008, banks and advisers are challenged to preserve client capital.
They must offer tools that allow clients to understand the potential impacts of market volatility.
Those firms operating without risk analytics tools do so at their peril.
Banks and Risk Analytics Tools According to Steve Culp, Accenture's global risk management practice, banks know they must continue to invest in risk analytics tools--including qualitative and quantitative processes and tools.
A poll conducted by Accenture shows that approximately 73 percent of banks plan risk analytics investments; they plan to invest approximately 10 percent more than in previous years.
Financial modeling, data quality/sourcing and systems integration tools are in high demand by banks.
Accenture's respondents say they need sophisticated risk analytics tools to reduce costs while improving credit performance.
Technology helps the bank to identify potential nonperforming loans.
The bank's relationship managers can take earlier steps to assist counterparties suffering financial distress.
Restructuring or refinancing existing loans before they become nonperforming assets is crucial to the bank's current and future profitability.
Identifying higher risk customers and unprofitable relationships helps the bank to deploy capital for maximum return.
Risk Management Solutions: Not One-Size Fits All Most bank clients require customized risk management solutions.
Culp says that clients must commit to gaining internal expertise and resources to manage risk management tools.
Smaller banks lag in the acquisition of new risk management tools.
Poor data quality or integrity yields less than ideal data governance.
The ability to manage and harvest data requires the client to integrate analytics tools across a field of data sources.
Effective risk management tools differentiate the bank from others.
Sophisticated clients compare and contrast the resources offered by banks for their use in portfolio and asset management.
Advances in Quantitative Finance and Software Solutions In an article published by Hubbis, financial software expert and CEO Jean-Luc Freymond discussed why wealth managers should focus on risk management as a path to improved portfolio returns.
Risk management tools allow asset managers to align investment proposals with clients' financial objectives.
"Know your customer" requires the bank or wealth manager to understand the client's risk profile.
According to Freymond, "With more accurate risk measures and better-diversified asset allocations, wealth management firms can offer superior performance and safer investment proposals that will match their clients' targets in terms of wealth preservation or capital growth.
" Risk analytics tools allow managers to implement and offer both risk management and mitigation processes.
"The ability to use and demonstrate this process is extremely important in today's highly-volatile environment where we see more and more nervous clients challenge their bankers on the topic of risk mitigation," says Freymond.
Use Risk Analytics Now Financial markets show historical periods of expansion and contraction.
In today's fully globalized financial environment, banks and financial managers must consider risk management and mitigation as part of the total client value proposition.
Preparing clients for volatility requires the firm's utilization of tools and processes to assist them in achieving long-term financial goals.
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