Risk Management Software for Banks

Risk management in the banking sector is aimed at identifying, assessing and mitigating the risks to which the bank is exposed, including credit, market, operational, liquidity and reputational risks. Proper risk management is also aimed at ensuring compliance with the regulations to which the financial sector is subject.

Risk management software offer tools and technologies to proactively identify a risk and take the necessary measures to manage it. The latest risk management applications allow banks to adapt quickly to changing situations and to make more informed decisions, thanks to much more precise and timely analyses.

The Risk Management Department must be able to rely on software that uses advanced data analysis algorithms and forecasting models. Banking risk management software therefore helps the management bodies of credit institutions and banking groups to make strategic business and financial decisions.

For credit institutions and financial companies it is therefore necessary to have a series of bank audit and credit scoring software tools that ensure the management and control of information flows, procedures and all decision-making levels of the organizational structures that put them in able to manage the implicit degree of uncertainty that characterizes banking and financial activity, to secure the entire system from banking risk with the financial analysis of derivatives and exchange rate, interest rate, price and volatility risks.

Risk management software allows a complete and consistent view of risks, considering both the macroeconomic scenario and the risk profile, making it possible to accurately represent the riskiness of all bank activities by means of simulations combined with a wide range of limits on various risk indicators with the function of:

• Regulatory compliance (compliance) with regard to the prevention of the risk of non-compliance with the regulations, including the risk of money laundering and terrorist financing;
• risk management aimed at identifying, measuring, controlling and managing other risks (credit, market, operational, strategic, etc.);
• internal audit entrusted to the internal audit function, which carries out checks to identify anomalous trends and violations of procedures.

Banking risk management involves, with different roles and responsibilities, all the management and control bodies of banking groups as regards audit, compliance, the strategic planning process of asset and liability management in banks (asset liability management or ALM) and liquidity and more generally overall risk management and also has an impact on the various operating structures of the subsidiaries.