June 6, 2014 - In order to optimize business performance while maintaining regulatory compliance, financial institutions should look to integrate risk, finance and compliance functions according to subject matter experts at Wolters Kluwer Financial Services.

To help institutions, Wolters Kluwer Financial Services has outlined its "five core benefits" that integrating the risk, finance and reporting functions of a business can bring when addressing such regulatory requirements as the European stress test, various Basel III elements including COREP, FINREP and liquidity reporting, as well as IFRS9 hedge accounting.

Five Core Benefits

• Integration of functions enables better support, accuracy and transparency to management decisions by bringing mutual impacts into perspective.
• Shared engines and analytics, such as cash flow engine, probability of default, fair value and forecasting & simulation, simplify the overall architecture and lowers the cost of ownership by removing redundant software.
• Shared market observations, such as credit assessment, means that additional processes can be avoided and economies of scale can be realized.
• Shared data provides the advantage of presenting data in a consistent way and avoids timely reconciliations.
• Through a unified risk and finance data layer, regulatory reporting templates are easily completed, with high quality data from multiple sources, allowing for increased efficiency and accuracy.

Wolters Kluwer Financial Services’ subject matter experts spoke of the importance and process involved in integrating both risk management, finance and reporting functions during events held through April and May in London, Brussels and Vienna. The events featured keynote speakers, Sharon Bowles MEP at London, Rudi Bonte special representative for banking at the National Bank of Belgium at Brussels and Attila Hucker from the OeNB SIDAT department. Wolters Kluwer Financial Services risk and finance experts at the events looked at how organizations can align these areas to not only gain a single view of compliance but also optimize performance of the business.

Nancy Masschelein, vice president, market management financial risk management and finance at Wolters Kluwer Financial Services, commented: “Underlying trends towards risk, finance and reporting integration are both a regulatory agenda and a business agenda. Regulatory changes such as IFRS9, Basel III, hedge accounting and the European stress tests demand greater alignment between risk, financial management and regulatory reporting. Firms who have taken the steps to align these functions increase shareholder value and capital saving, as well as develop risk-based pricing structures.”

Jeroen Van Doorsselaere, director, business development for global finance and performance at Wolters Kluwer Financial Services, commented: “Integrated risk and finance gives institutions the opportunity to avoid costly reconciliations while providing forward-looking and risk adjusted performance management. Furthermore, risk management stresses used across the organization provide institutions with the first choice on the market to retrieve capital or additional resources. Finally, it gives treasurers and product control the necessary data to conduct clear processes and reports like IPV and P&L explain.”