More than 80% of risk professionals view risk technology (risktech) innovation as imperative to their banks’ competitive edge, with tech spend being directed towards effectiveness rather than cost reduction. That’s according to a new survey and white paper, “Sharpening risktech’s cutting edge: Maximising value from risktech investment”, published by Wolters Kluwer’s Finance, Risk & Regulatory Reporting (FRR) business in association with Risk.net.

Risk.net interviewed more than 80 senior risk and technology professionals at leading banks globally and found respondents to be distinctly lukewarm in their assessment of existing risktech systems.

Around 61% described the overall performance of their systems as fair, poor or very poor, citing a lack of clear business objectives and internal wranglings over project priorities and scope as the two main barriers to effective risktech investment. Notably, 76% of respondents are planning upgrades in the next two years, with cloud infrastructure and artificial intelligence applications being the two most likely directions for developing risktech, while blockchain and big data are seen as longer‑term opportunities. Data analytics and management, however, are also seen as being in need of immediate investment.

“There is genuine desire to enhance risktech applications and infrastructure, driven by business evolution and internal perception of emerging technologies’ potential value. In fact, risktech implementation can provide hidden value when aligned with enterprise tech, data transformation and other external initiatives, including those driven by regulatory bodies,” commented Jeroen Van Doorsselaere, Vice President of Global Product & Platform Management for Wolters Kluwer FRR. 

Chief Risk Officers (CROs) noted how incorporating risk is top of mind as banking enterprises evolve. Likewise, banks have identified existing areas of deficiency where further optimisation and automation are required. But, just as crucially, according to the CROs interviewed for the survey, cost cutting alone won’t do the trick, meaning emerging technology and its implementation must emphasise holistic benefits and durability over short-term gains.

To help with such concerns banks are turning to OneSumX for FRR, Wolters Kluwer FRR’s best-in-class integrated regulatory compliance and reporting solution suite that establishes a single source of data for finance, risk and regulatory reporting that is enriched with value-added content from in-house experts.

Wolters Kluwer FRR, which is part of Wolters Kluwer’s Governance, Risk & Compliance (GRC) division, is a global market leader in the provision of integrated regulatory compliance and reporting solutions. It supports regulated financial institutions in meeting their obligations to external regulators and their own board of directors.

Wolters Kluwer FRR receives frequent independent recognition of its excellence and innovation, celebrating a record year for award wins in 2020. Risk magazine recently awarded the company its coveted Regulatory Reporting System of The Year Award for the third year running and Wolters Kluwer FRR is the #1 provider in both Regulatory Reporting and Liquidity Risk according to the RiskTech100, as compiled by Chartis Research. Central Banking, meanwhile, named Wolters Kluwer FRR its 2020 Technology Partner For Regulatory Compliance.