DUBLIN, Calif., April 17, 2012 /PRNewswire/ -- Almost seven out of 10 (68 percent) North American capital markets executives believe a significant portion of their firms' resources will be consumed by regulatory burdens and data latency issues, while 96 percent admit that stress testing has not addressed all the important risks to the banking system, according to a recent survey by Sybase Inc., an SAP® Company (NYSE: SAP) and a leading provider of enterprise and mobile software.
"Regulatory challenges coupled with rapid data growth and the 'urge to merge' call for world-class, innovative technology that can consistently meet the demanding high-performance standards of today's capital markets firms," said Neil McGovern, senior director of financial services marketing, Sybase, an SAP company. "Customers facing regulatory challenges are required to collate very large amounts of data on-demand to meet intra-day regulatory requirements. This is why institutions need real-time predictive analytics solutions capable of streamlining and maximizing this complex function."
A similar survey was conducted across the EMEA and APAC regions that showed similar findings. In EMEA, 41 percent cited regulatory burdens, followed by data latency (31 percent) and front-middle-back office integration (27 percent). Executives surveyed in APAC, however, believe that front-middle-back office integration (45 percent) is the number one challenge, while 30 percent cited data latency followed by regulatory burden (25 percent).
With regard to the reliability of bank system stress testing, a combined 96 percent of North American respondents were only "somewhat confident" or even "not at all confident" that stress testing has addressed all the important risks to the banking system, compared to 93 percent in EMEA and 86 percent in APAC. When asked about the preferred frequency of stress testing, interestingly nearly half of North American respondents (46 percent) believe stress testing should be conducted at least once every six months, while 42 percent believe that stress testing should be performed once a year. Majority of EMEA and APAC respondents – 68 percent and 60 percent respectively prefer more frequent stress tests –at least once every six months.
The survey also pinpoints concerns related to Basel III and its impact on banks' profitability. A combined 90 percent of North American and 90 percent of APAC respondents believe Basel III regulations will have "moderate impact" to "significant impact" on profitability. Ninety-six percent of EMEA respondents agree.
"Real-time risk management strategies are key to ensuring effective regulatory compliance, including the proposed capital adequacy requirements in Basel III," McGovern continued. "There is now a confluence of regulatory and business reasons for capital markets firms to upgrade their risk architecture."
When asked about their struggle to capture data from trading systems for audit, compliance or future analytical purposes, respondents from the three markets could not agree. The majority of North American respondents (68 percent) say they do not face challenges in capturing rapid data growth while three quarters of EMEA respondents (74 percent) said otherwise. APAC respondents, on the other hand, were split almost evenly over their struggle—51 percent say they do face a challenge, while 49 say they do not.
Sybase® technology is used by 46 of the top 50 global banks and securities firms. Sybase financial solutions include advanced data management and analytics that improve trading, risk management, compliance and market data management across the enterprise. For more information on Sybase's Capital Markets industry solutions, visit: www.sybase.com/capitalmarkets, read http://blogs.sybase.com/tradingandrisk, or follow us on Twitter at @SybaseFSI.
Note to editors:
185 survey respondents shed valuable light on the latest challenges facing the global capital markets industry today. Conducted over the past six months, the survey respondents consist of 50 North American senior managers and C-suite risk management professionals from major capital markets firms, 72 from EMEA, and 63 from APAC.
Sybase, an SAP® company, is an industry leader in delivering enterprise and mobile software to manage, analyze and mobilize information. We are recognized globally as a performance leader, proven in the most data-intensive industries and across all major systems, networks and devices. Our information management, analytics and enterprise mobility solutions have powered the world's most mission-critical systems in financial services, telecommunications, manufacturing and government. For more information: visit www.sybase.com. Read Sybase blogs: blogs.sybase.com. Follow us on Twitter at @Sybase.
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