Intelligent Risk Management Solutions on AWS Marketplace

The Evolving Challenges in Financial Risk Management

The financial services industry is grappling with a multifaceted array of challenges, most notably the persistent presence of outdated legacy systems and the troublesome fragmentation of data. These issues collectively and severely impede the efficiency of risk monitoring processes, rendering them less effective and more cumbersome. Leading consulting firms such as Deloitte and Ernst & Young consistently emphasize that the bedrock of any effective risk framework must be built upon robust governance principles. This means that financial institutions need to proactively develop adaptive strategies that can respond to the ever-changing dynamics of the market. Furthermore, the integration of comprehensive cybersecurity measures is paramount to protect sensitive data and maintain operational integrity. It is also critical to anticipate the evolving expectations of customers, who increasingly demand personalized and seamless experiences. Finally, financial institutions must formulate resilient responses to the inherent uncertainties of the market, ensuring they can weather any potential storms.

Progressive financial institutions are actively transitioning away from traditional, reactive approaches to risk management. Instead, they are embracing data-driven methodologies, which leverage the power of information to make more informed decisions. They are also deploying integrated solutions that unify disparate information sources, providing real-time insights into risk exposures. These solutions facilitate predictive modeling, enabling institutions to anticipate potential risks before they materialize. This evolution elevates risk management from a mere compliance function to a strategic value creator, contributing directly to the bottom line.

Three Transformative Success Stories

The webinar showcased three compelling examples of how financial institutions are revolutionizing their operations to improve risk management and drive strategic advantage. These stories highlight the power of innovative solutions and the benefits of a proactive approach to risk.

Toyota Financial Services: Integrating Customer Intelligence with a SaaS Platform

Toyota Financial Services Italia faced a significant hurdle in the form of fragmented customer data scattered across various systems. This fragmentation severely limited their ability to personalize services and manage risk effectively. To address this challenge, they implemented the SAS Viya platform, a strategic move that completely reshaped their data strategy. The platform centralized scattered customer information into a unified database, providing a single source of truth for all customer-related data.

The IT analytics team leveraged advanced machine learning techniques to develop innovative predictive models. These models uncovered hidden data patterns and correlations, enabling them to achieve remarkable results. Specifically, they were able to enhance the customer experience through data-driven personalized services, tailoring their offerings to meet the specific needs of each customer. They also achieved high-precision prediction of customer churn rates, allowing them to proactively identify and retain at-risk customers. Furthermore, the implementation of the SAS Viya platform established a comprehensive risk management foundation, providing a solid base for identifying, assessing, and mitigating various risks. Finally, they developed innovative approaches to address compliance requirements, ensuring they remained compliant with all relevant regulations.

Global Financial Services Firm: Revolutionizing Compliance Workflows with Smarsh

A leading global financial services firm previously relied on multiple vendors to manage compliance oversight of electronic communications. This fragmented approach was not only wasteful, leading to unnecessary expenses, but also limited their ability to extract valuable insights from communication data. The lack of a unified platform hindered their ability to identify patterns and trends that could indicate potential compliance violations.

By adopting the Smarsh Enterprise Platform, the company completely transformed its compliance operations, realizing several tangible benefits. First and foremost, they achieved annual cost savings of $7 million by consolidating their compliance efforts onto a single platform. They also experienced substantial improvements in investigation efficiency, allowing them to resolve compliance issues more quickly and effectively. The AI-driven monitoring system reduced false-positive alerts by 70%, freeing up compliance officers to focus on more critical tasks. The platform also expanded foreign language coverage for global compliance, ensuring they could monitor communications in multiple languages. Finally, they discovered new revenue opportunities from communication data, leveraging the insights gained from communication analysis to identify potential business opportunities.

Fortitude Re: Transforming Derivatives Trading Operations with Numerix

Fortitude Re partnered with Numerix to establish a comprehensive risk management system covering a wide range of asset classes. Initially, a small team of three employees managed variable annuity businesses, a task that required external analytical tools to enhance their capabilities. The complexity of derivatives trading demanded sophisticated tools for accurate risk assessment and management.

‘By understanding liability movements through Numerix, we can generate more accurate hedging strategies,’ explained Craig Vogel of Fortitude Re. ‘I can hedge liability risk as of 3 PM that afternoon and reduce mismatches with a high degree of precision.’ This capability allowed them to minimize potential losses and optimize their hedging strategies.

Numerix’s cloud-native solution on AWS eliminated the need for Fortitude Re to hire 15-20 employees to manage infrastructure. This SaaS solution provides a secure environment and rigorous security standards while offering enhanced control for trade validation through dual-person approval mechanisms. The cloud-based nature of the solution also provided scalability and flexibility, allowing them to easily adapt to changing market conditions.

‘From a client perspective, they are getting a robust and seamless user experience,’ emphasized Arsen Arutyunov of Numerix. ‘For them, it’s a streamlined experience, which is exactly what we aim for.’ The user-friendly interface and intuitive features of the Numerix solution made it easy for users to access the information they needed and perform their tasks efficiently.

Expert Recommendations: Keys to Risk Management Transformation

During the webinar, practitioners who successfully drove risk management modernization shared valuable experiences and insights. Their recommendations provide a roadmap for other financial institutions looking to embark on a similar journey.

• Executive management support is crucial for transformation projects. Without strong support from the top, it is difficult to secure the necessary resources and drive organizational change.
• Practical strategies for balancing innovation and compliance are essential. Financial institutions must find ways to innovate while remaining compliant with all relevant regulations.
• Enhancing analytical capabilities while ensuring data security is paramount. Financial institutions must invest in advanced analytics tools while ensuring the security and privacy of their data.
• Effective methods for demonstrating the value of risk management are necessary to justify investments in risk management solutions.

These experts also shared insights into the challenges and success factors of deploying risk management solutions on the AWS Marketplace. Their experiences provide valuable guidance for organizations considering this approach.

AWS Marketplace: Streamlining the Procurement Process

Financial institutions can gain significant advantages when modernizing their risk management capabilities. The showcased case studies demonstrate the power of analytical techniques in transforming risk management from a reactive function to a proactive, strategic asset. By centralizing data, implementing real-time analytics, and automating key processes, these institutions lowered costs, improved decision-making quality, and transformed risk management into a strategic function that creates business value.

The AWS Marketplace, a digital catalog containing over 20,000 partner products, helps customers streamline software procurement processes. It provides a centralized platform for discovering, evaluating, and purchasing software solutions. According to Forrester research, finding, purchasing, and deploying solutions through the AWS Marketplace takes approximately half the time compared to other sales channels. This efficiency translates into significant cost savings and faster time to value.

For financial institutions seeking to revolutionize their risk management, the AWS Marketplace offers flexible pricing options, including free trials, pay-as-you-go, and enterprise discount plans. These options allow organizations to choose the pricing model that best suits their needs and budget. Multiple deployment options help customers customize software configurations according to security policies and licensing terms, providing greater flexibility and control.

Diving Deeper into Transformative Solutions

To further explore these transformations and understand how specific solutions can address your organization’s risk management challenges, let’s delve deeper into the offerings of SAS, Smarsh, and Numerix, highlighting the key features and benefits that make them stand out in the AWS Marketplace. Each of these solutions offers unique capabilities that can help financial institutions improve their risk management practices.

SAS Viya: Revolutionizing Data Strategy and Predictive Modeling

The SAS Viya platform, as demonstrated by Toyota Financial Services Italia, provides a comprehensive suite of advanced analytics tools designed to consolidate and analyze vast amounts of data. Its strength lies in its ability to integrate disparate data sources into a unified data repository, enabling organizations to gain a holistic view of their operations. This unified view is essential for effective risk management, as it allows organizations to identify and assess risks across all areas of their business.

Key Features of SAS Viya:

• Advanced Machine Learning: Enables the development of sophisticated predictive models to identify hidden patterns and trends in data. These models can be used to predict a wide range of risks, such as customer churn, fraud, and market volatility.
• Data Visualization: Offers interactive dashboards and visualizations to explore data and communicate insights effectively. These visualizations make it easier to understand complex data and identify potential risks.
• Real-Time Analytics: Provides the ability to analyze data in real-time, enabling proactive decision-making and risk mitigation. This real-time capability allows organizations to respond quickly to emerging risks.
• Scalability: Designed to handle large volumes of data and complex analytical workloads. This scalability ensures that the platform can meet the growing needs of financial institutions.
• Compliance Support: Offers features to help organizations meet regulatory requirements and ensure data governance. These features help organizations comply with regulations such as GDPR and CCPA.

Benefits of SAS Viya:

• Improved customer experience through personalized services.
• Enhanced risk management capabilities.
• Increased operational efficiency.
• Better decision-making.
• Reduced costs.

Smarsh Enterprise Platform: Streamlining Compliance and Uncovering Insights

The Smarsh Enterprise Platform offers a comprehensive solution for managing compliance oversight of electronic communications. It provides a centralized platform to capture, archive, and analyze communications data, helping organizations meet regulatory requirements and mitigate risks. This platform is essential for financial institutions that are subject to strict regulatory requirements regarding electronic communications.

Key Features of Smarsh Enterprise Platform:

• Communication Capture: Captures a wide range of electronic communications, including email, social media, and instant messaging. This comprehensive capture ensures that all relevant communications are captured and archived.
• Archiving: Provides secure and compliant archiving of communications data. This archiving ensures that communications data is stored securely and in compliance with regulatory requirements.
• Compliance Monitoring: Monitors communications for potential compliance violations. This monitoring helps organizations identify and address potential compliance issues before they escalate.
• eDiscovery: Facilitates eDiscovery requests and investigations. This capability streamlines the eDiscovery process and reduces the cost of compliance.
• Analytics: Offers advanced analytics to identify patterns and trends in communications data. These analytics can help organizations identify potential risks and opportunities.

Benefits of Smarsh Enterprise Platform:

• Reduced compliance costs.
• Improved investigation efficiency.
• Enhanced risk management.
• Discovery of new revenue opportunities.
• Increased operational efficiency.

Numerix: Transforming Derivatives Trading Operations with Cloud-Native Solutions

Numerix offers a suite of cloud-native solutions for risk management, pricing, and valuation of derivatives. Its solutions are designed to help organizations make informed decisions, manage risk effectively, and meet regulatory requirements. The cloud-native architecture of these solutions provides scalability, flexibility, and cost-effectiveness.

Key Features of Numerix:

• Pricing and Valuation: Provides accurate and transparent pricing and valuation of derivatives. This accurate pricing and valuation is essential for effective risk management.
• Risk Management: Offers comprehensive risk management capabilities, including stress testing and scenario analysis. These capabilities help organizations assess and manage the risks associated with derivatives trading.
• Regulatory Compliance: Helps organizations meet regulatory requirements, such as FRTB and BCBS 239. These features help organizations comply with complex regulatory requirements.
• Cloud-Native Architecture: Built on a cloud-native architecture, providing scalability, flexibility, and cost-effectiveness. This cloud-native architecture allows organizations to scale their risk management capabilities as needed.

Benefits of Numerix:

• Improved decision-making.
• Enhanced risk management.
• Reduced costs.
• Increased operational efficiency.
• Faster time to market.

Best Practices for a Successful Transformation

Embarking on a risk management transformation journey requires careful planning and execution. Here are some best practices to consider to ensure a successful outcome.

1. Secure Executive Sponsorship: Gain buy-in from senior management to ensure the project receives the necessary resources and support. Executive sponsorship is critical for driving organizational change and ensuring the project’s success.
2. Develop a Clear Vision and Strategy: Define the goals of the transformation project and develop a roadmap to achieve them. A clear vision and strategy will provide direction and focus for the project.
3. Choose the Right Technology: Select solutions that align with your organization’s needs and goals. Selecting the right technology is essential for achieving the desired outcomes.
4. Integrate Data Sources: Ensure that data is integrated across systems to provide a holistic view of risk. Data integration is critical for effective risk management, as it allows organizations to identify and assess risks across all areas of their business.
5. Automate Processes: Automate key processes to improve efficiency and reduce errors. Automation can help organizations streamline their risk management processes and reduce the risk of human error.
6. Monitor and Measure Results: Track progress and measure the results of the transformation project to ensure it is meeting its goals. Monitoring and measuring results is essential for ensuring that the project is on track and achieving its desired outcomes.
7. Embrace a Culture of Innovation: Foster a culture of innovation to encourage continuous improvement in risk management practices. A culture of innovation can help organizations stay ahead of the curve and adapt to changing market conditions.
8. Invest in Training and Development: Provide employees with the training and development they need to effectively use new technologies and processes. Training and development are essential for ensuring that employees can effectively use new technologies and processes.
9. Collaborate with Experts: Partner with experts who have experience in risk management transformation. Collaborating with experts can provide valuable guidance and support.
10. Stay Abreast of Regulatory Changes: Keep up to date with regulatory changes and adapt your risk management practices accordingly. Staying abreast of regulatory changes is essential for ensuring compliance.

By following these best practices, financial institutions can successfully transform their risk management capabilities and gain a competitive advantage in today’s dynamic market. The AWS Marketplace provides a valuable resource for finding and deploying the innovative solutions needed to drive this transformation. It offers a wide range of solutions from leading vendors, as well as flexible pricing options and deployment models.