Business

Banks come under pressure to remain profitable

Published

8 years ago

May 16, 2018

Banks are under pressure to not only comply with the ever-changing regulations, but also to modernise their systems and remain profitable as competition with Financial Technology (FinTech) firms thickens.

Speaking recently at the SAS Risk & Finance Analytics Roadshow in Lagos, Senior Business Solutions Manager, Pre-Sales Risk Practice, SAS, Charles Nyamuzinga, noted that banks face additional challenges, including risk analytics skills shortages, data management issues and integrating their risk management and finance processes across the enterprise.

But, on the positive side, they have started considering technology as a way of eliminating these challenges and have access to new streams of data that are also helping to advance the financial inclusion mandate.

SAS, a leading global analytics firm, as a technological partner for banking institutions has always played a proactive role in fostering innovation and transformation of processes and systems, from regulatory compliance to strategic decisions support, from digitisation to risk assessment in real-time and also providing analytics solutions allowing banks to adapt more quickly to regulatory changes while minimising costs.

Recent regulatory changes in the banking industry mean that banks across Africa should already be compliant with the new IFRS 9 accounting standard, which changes the way they calculate expected credit losses.

There is also the need to start thinking about the new ‘Basel IV’ framework, which impacts on how banks calculate their risk weighted assets and the amount of capital they need to offset those risks.

Other issues, which banks are grappling with include incorrect modelling caused by data management and quality issues, skills shortages, drawing data from some disparate systems, credit loss calculations, and risk modelling.