Deloitte and IBM have announced the latest step in their long-standing strategic alliance which is specifically designed to create a “transformative series” of risk management and regulatory compliance solutions.
Significant changes have occurred in the risk landscape in recent years, subsequently increasing the regulatory compliance demands placed on financial services organisations and, at the same time, driving the need for enhanced risk management approaches.
Firms are facing regulatory, shareholder and public pressure to further enhance governance systems while also increasing transparency, competitiveness and profitability. As a result, financial services companies and regulators alike are necessarily having to revise their expectations around how risk is both identified and mitigated.
There have also been significant technological advances in big data, analytics and cognitive computing which can generate much deeper insights (and faster than ever before). However, organisations have not yet been able to effectively apply all of these capabilities within one solution.
Deloitte and IBM are developing solutions for financial services firms to more efficiently address their immediate compliance and conduct requirements. One of these is a regulatory compliance and control solution (which is being demonstrated at the IBM Vision Conference in Florida this week). The solution combines Deloitte’s regulatory intelligence with advanced technology from IBM. It will leverage IBM Analytics and cloud capabilities, with plans to incorporate Watson cognitive computing to disaggregate and classify regulations paragraph by paragraph, in turn helping clients to compare their control frameworks in direct relation to current and emerging regulatory mandates.
This solution can help to provide a streamlined view across the business, assisting with the confirmation of regulatory control coverage, managing remediation and prioritising the efforts of future regulatory change programs.
In addition, Deloitte and IBM have begun to develop the next generation of capabilities for managing risk and regulatory compliance. Moving beyond the use of traditional structured data to leverage unstructured information and external data, the solution will include more predictive capabilities. This can be applied in real-time to help deliver actionable insights, limit exposure and reduce the impact of compliance and conduct issues that may arise.
Big data and predictive analytics
“The global enterprise risk management domain is undergoing significant transformation, and emerging technologies like big data and predictive analytics can be used to address complex regulatory requirements,” said Tom Scampion, global risk analytics leader at Deloitte UK.
“We’re excited to be working with IBM to apply their market leading technologies and platforms and so enable faster, more insightful business decisions. This alliance aims to completely re-frame and re-shape the risk space.”
Alistair Rennie, general manager of analytics solutions for IBM, commented: “Financial services firms are under tremendous pressure which has forced them to spend the majority of their IT budgets on addressing regulatory requirements. There’s an opportunity to transform the approach organisations are taking and leverage the same investments to go beyond compliance to deliver real business value.”
Rennie concluded: “We’re excited to be working with Deloitte. They are the leading global risk consultancy provider with a reputation for helping clients to pro-actively manage their enterprise risk. Combining their knowledge with our technology will provide our clients with breakthrough capabilities and deliver risk and regulatory intelligence in ways previously not possible.”