Operational risk technology is still hot
It's been the success story of 2008, and an increasing number of financial institutions are no longer just paying lip-service to operational risk and are instead looking use it to bolster performance. Technology is paying an integral part and this is creating ongoing job opportunities.
Increasing cases of fraud within financial institutions, wider systematic risks and compliance changes as a result of the current crisis have spurred firms to invest in technology around the operational risk space, reckons Damian Shaw-Williams, financial services technology senior analyst at Datamonitor.
"The necessity of testing extreme scenarios should now be obvious to all," he says. "There will be a shift in focus from purely short-term profitability to demonstrating ongoing stability."
Similarly, the 2009 Ernst & Young Business Risk Report reveals that risk management is increasingly in the spotlight as banking, insurance and asset management firms compete over the same customers in a tough market.
"Companies must now delve deeper into the extended risk universe beyond finance and compliance issues to areas of operational and strategic risk," said Todd Tueller, Partner at E&Y.
But before you get too excited, thinking firms are about to hire armies of developers, it seems that most firms are currently still at the planning stage on their IT strategy.
Abigail Wauby, manager of the IT division at recruiters Project Partners, says: "At the moment hiring is largely at a senior level - programme managers and development managers - as firms look to develop a strategy for their IT projects and decide whether it will be an enhancement or a new system build."
A recent study into the technology plans of investment managers by consultancy Investit highlighted operational risk as a key focus going into 2009.
However, Simon Stratford, who heads up Investit's IT Value Survey, says: "Operational risk projects don't seem to be progressing at the rate they were - they're either not getting signed off or are delayed. Projects in this space are more about investment risk."
