OPRISM (Operational Risk Management)
OPRISM Advantage:
digiBlitz's strength lies in establishing an Operational Risk Management Solution to meet the compliance requirements from the very first step. The solution can be used as a stand-alone Self-Assessment tool for Basel II compliance. The Solution helps organizations in quick implementation of Operational Risk Management and BASEL II Compliance processes, by using the framework to Identify, Assess, Monitor and Control the Operational Risks.
The Solution combines digiBlitz's strong domain knowledge of Basel II & compliance requirements and the technical expertise in terms of resources, helps your organization to implement the Operational Risk Management process in a faster way and brings tremendous amount of benefits. digiBlitz's approach to Risk Management considers both the wider implications of the Basel II Accord, and its integration with the information management strategy and approach of the organization.
digiBlitz has capabilities to assist your organization's Risk Management Initiative, with having total flexibility of implementation and adaptability to Enterprise wide Risk Management Solution.
ARCHITECTURE and FEATURES
The solution comprises five integrated components providing a framework that enables banks to comply with the new accord and adopt the best practices.
digiBlitz positions itself as a software solution provider enabling your system to work smoothly and efficiently.
digiBlitz Operation Risk Management Solution (OPRISM) would enable you to Define the Risk model, Identify Risk Areas and relevant Risk Parameters, Associate Risks with the Risk Framework, Monitor & Control them by defining and assigning the plan of action. The features included are:
1. Organization Management
2. Risk Management Module
a. Risk Framework
b. Risk Definitions
c. Risk Assessments
d. Task Assignments
e. Risk Monitoring and Control
f. OPRISM Dashboard
3. Knowledge Repository
4. Workflow Management
5. Reporting
BENEFITS TO YOUR BUSINESS
Managerial Benefits
| Clear communication of Risk appetite and processes in place to amend the credit limits in a changing environment |
| Improved capability for setting and monitoring of Risk limits |
| Consistent measurement of Risk across all products and lines of business |
| Identification and management of inter-relationships between Risks |
| Improved internal audit approach as a result of advanced level mapping of Risk parameters with audit processes |
| A better framework for new business development |
Financial Benefits
| Lower loan losses due to: |
a) Better Credit Risk evaluation capacity for new Credits
b) Early detection of deteriorating Credits
c) Better diversification of Risk exposures |
| Better Risk adjusted pricing |
| Potentially higher yields from previously under priced Credits |
| Reduction in long term adverse portfolio selection |
| Lower operational losses resulting from better controls and monitoring |
For further questions, please contact your Risk Management Solutions Procurement Associate, Praful Mayekar at praful@digiblitz.com or 703-637-9392 - Ext 102.
BASEL II
Compliance and its Challenges
Financial losses from operational failures pose significant risk to the financial institution and must be accounted for under GAAP rules as well as those under the Advanced Measurement Approach (AMA) in the Basel II Accord. New automated technologies, more complex products, e-banking, acquisitions and trading catastrophes have rapidly increased the need for more rigorous operational control. To meet this business and regulatory challenge, a comprehensive, holistic solution is required to collect, analyze, report on and mitigate operational risks. digiBlitz has developed a solution for Operational Risk Management called OPRISM, satisfying all the technological needs of today's financial institutions.
Basel II requirements stipulate the capital charges for three major Risks viz Credit Risk, Operational Risk and Market Risk. The efficient estimation of Risk capital charge depends largely on the calculus of Risk scoring, Value at Risk (VaR) models, warehousing of critical data like probability of default (PD), loss given default (LGD) and system integration. The complexities of calculus, data warehousing and system integration are the most important challenges on the path towards the Advanced Internal Rating Based Approach (A-IRB for Credit Risk) and Advanced Measurement Approach (AMA for Operational Risk)
These challenges have made BASEL II compliance go beyond mere product implementation. The implementation would largely depend on the following factors in the organization:
a) Risk Management Policy
b) Risk Management Process
c) Risk Framework and Organization Structure
Benefits of Compliance:
Due to the significant changes in bank policies, procedures, methods and the need for technological solutions that do not exist or are inadequately developed in most of the banks today, Basel II compliance is probably the single greatest challenge - and opportunity - for banks in the next few years. The Basel II guidelines promulgated by the Bank for International Settlements (BIS) establish capital adequacy requirements and supervisory standards for banks to be implemented by 2007. Basel II provides financial institutions with opportunities to realize many managerial and financial benefits.
For further questions, please contact your Risk Management Solutions Procurement Associate, Praful Mayekar at praful@digiblitz.com or
703-637-9392 - Ext 102.
