The implementation of the Basel III Accord will have major implications on the global banking industry as it continues to strengthen the foundations laid with Basel II. Following the turmoil in the financial markets, regulators have made considerable changes to the previous framework with the view to improving stability within the banking system and strengthen risk management and corporate governance within organisations.
The accord is formed of 3 pillars:
- Pillar 1: Minimum Capital Requirements
- Pillar 2: Supervisory Review for Enterprise Wide Risk Management
- Pillar 3:Market Discipline and Risk Disclosure
Each of the pillars is based on the existing Basel II framework although there are far reaching changes within each which will create considerable challenges to those organisations covered by the regulation.
Changes to Pillar 1 require an organisation to hold significantly greater amounts of high quality Tier 1 captial than was previously required and sweeping changes to the risk and liquidity frameworks will have a considerable negative effect on the return on earnings seen in many business areas.
In a similar manner, changes to the second and third pillars necessitate that senior management will have to be able to demonstrate to the regulator that they can manage their risk on an enterprise basis. The requirement for a greatly improved risk architecture allowing risk to be measured and managed across the enterprise along with an associated drive for an improvement in data quality and availability will cause significant challenges both from a technical and business perspective. One of the key aspects to successfully achieving this, is to be able to bring together information from many disparate sources both in order to ensure that the organisational and control framework is functioning as required,and to demonstrate to the regulators that this is in fact the case.
With this in mind, Symb has developed the Aptius framework. Aptius provides an organisation with the ability to meet its obligations under Basel III and provides a framework for the complete design, analysis and management of the enterprise risk process.
Aptius
Aptius represents an enterprise risk management platform supporting multiple business units that allows a model of the enterprise to be built in terms of its risk through to calculation of estimates for risk and capital over multiple scenarios using data from disparate sources including databases, Excel spreadsheets, Sharepoing and Infopath. It includes powerful visualisation tools, multi-dimensional analysis and reporting, as well as providing full regulatory requirements management framework.
