Banks will likely upgrade their risk management technology and spend ~10% more this year in the wake of the banking crisis, experts say.
Financial institutions have increased their desire for technology that provides real-time data analysis, stress-test scenarios, and communication aggregation as they seek to protect themselves from risk.
After SVB’s collapse, enterprises are looking critically at their own risk management and planning to up their investments: An analyst predicts in American Banker that “banks will increase their annual spends on risk technology by 8% to 12% in the next 12 months.”
Financial institutions have long had robust tech teams and robust risk teams, but the events of the past month underscored their need to coordinate more closely in real-time.
For example, Vanguard CIO Nitin Tandon recently spoke out on the topic of how FinServs’ risk and IT divisions need to come together: “Technology plays a key role in being able to analyze the data, come back with the risk profiles, and develop risk postures.”
To that point, it’s essential that any data management solution work across organizational silos and take advantage of alternative data sources. For example, the way that communication channels like Twitter and WhatsApp groups contributed to Silicon Valley Bank’s collapse highlighted the need to monitor external datasets.