13 November 2003

IT-Director.com: Operational Risk

IT-Director.com: Operational Risk: "Operational Risk

Thursday 13th November 2003
Technology Channel: Data Management
By Phil Howard
Bloor Research

I was recently a speaker at a conference, organised by IBM, on Basel II. I was there to talk about the issues arising from the huge data volumes required to meet the needs of Basel II.

I do not claim to be any sort of an expert on Basel II and, as far as I am concerned, the data issues arising from Basel II are not so very different from those that arise out of Sarbanes-Oxley, the International Accounting Standards or any of the other new forms of corporate governance that are increasingly required. From my perspective, you need to be able to store and retrieve large additional amounts of data; you may well need to access data from multiple, heterogeneous data sources; and you need to be able to track the data. You may also need some form of reference data management system. That is, a 'golden copy' of the meanings of your data.

However, while all of that may be interesting, the best part of conferences is talking to delegates and it appeared to me, from the conversations I had, that data was not the major issue for most of the banks at this conference, but business processes. More particularly, they did not know how to model their operational risk, which is the key requirement of Basel II."

Any ORM project is going to be similar to any other software engineering project. You have got to do your Business Reference Models first. See Adaptive for some people who really get it.

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