26/10/2011
By Scott Thompson
Nine out of ten bankers are not confident over stress testing while three out of four struggle to capture trading data. That’s according to a new survey from Sybase, conducted in London last week at its Financial Services Executive Summit, which drew senior managers and C-suite risk management professionals from major capital markets firms.
When asked about the reliability and frequency of bank system stress testing, 94 per cent of respondents were either not at all confident or only somewhat confident that stress testing has addressed all the important risks to the banking system. Directly related, 84 per cent believe stress testing should be upped to at least every six months. Currently, EU regulators carry out yearly stress tests on the biggest lenders in the region.
Three out of four respondents said they struggle to capture data from trading systems for audit, compliance or future analytical purposes. At the same time, 75 per cent believe data latency and regulatory challenges will consume the most significant portion of their firm’s resources, followed by front/middle/back office integration (25 per cent).
“Merging front and middle office in particular presents numerous challenges, yet they are clearly outweighed by the business benefits. These lines will only continue to blur,” says Stuart Grant, financial services business development manager at Sybase.
Basel III’s impact on profitability will range from moderate to significant, according to 98 per cent of those surveyed, indicating another area of concern added to the Eurozone’s current anxiety over sovereign debt issues plaguing Greece and other countries. “There is a significant amount of uncertainty and concern among participants in the capital markets community over the current state and future outlook for the industry. We’re clearly seeing the persistence of chronic challenges, with no immediate relief in sight,” says Grant. “These results don't come as a surprise, based on the continual feedback we elicit from our customers. This is why SybaseAnalytics solutions such as ESP and RAP are being adopted by customers facing regulatory challenges.”
