Sponsor's article > Banks look for savings with ORM

Operational risk management (ORM) is now under the spotlight with banks realising that there are savings to be made, according to a recent survey by SunGard Trading and Risk Systems. SunGard also found that Basel II is a significant driver for ORM projects.

The survey took place in December 2003. SunGard spoke to operational risk managers from a range of banks and from both sides of the Atlantic.

For smaller banks, cost is the main concern whereas larger banks are more concerned with what they can achieve by integrating sophisticated ORM across the enterprise. Smaller banks are happy to let larger banks lead so that they can adopt proven systems later on, rather than sink money into systems that might become obsolete.

Nearly half the respondents see capture of loss data as one of the most critical issues to address while one third mentioned key risk indicators. These findings were consistent across all institutions, regardless of size.

More than half of the banks surveyed have explicit ORM policies in place along with an ORM or Executive Committee. The larger the bank, the more advanced processes are in place.

Over a third of institutions are working with external consultants to address operational risk. In half these cases the consultants are installing or actually providing ORM software.

Over one third of respondents said they would seriously consider an application service provider solution.

SunGard Trading and Risk Systems