July 5, 2005
Risk Management is an area of vital importance for all financial services organizations and the modern regulatory environment ensures that risk will remain at the top of the agenda. Financial institutions are under constant pressure to comply with a host of new regulations and there has been a steady increase in the number of such stipulations with which they need to comply.
Having started out with the view that compliance was simply a burden and a drain on resources, many organizations are now waking up to the benefits of tackling compliance strategically. The notion of achieving risk management at the ‘enterprise level’ is gaining ground. They need to build infrastructures to enable compliance with the regulators' demands as this evolves.
Reliance Mutual Fund has been using Credence FundMetrics, the comprehensive risk management solution designed for mutual funds for about 6 months now. FundMetrics is an enterprise-wide real-time limits management solution for market and operational risks. It is designed to track complex internal and regulatory limits and exposures and report the utilization status on a real-time basis. The solution also calculates all the relevant risk-return numbers for the fund. Fundmetrics at Reliance MF is integrated with Credence iDEAL, the investments management solution, to retrieve all outstanding portfolio information and process the same.
The Credence online limits management module is an enhancement to FundMetrics and enables financial institutions track and report internal and regulatory compliance for limits and exposure management.
This module works across all asset classes including derivatives, has multi-level authorisation screens, limit previews and dealer dashboards which display exception and breach warnings. The real-time, pre-deal limit checks enable dealers to perform "what if" scenarios on trading ideas. Real-time reporting to all users of the application ensures that limit and compliance information is disseminated instantly and helps provide increased transparency across the organization.
With this solution limits monitoring, compliance and reporting is now a simple task, relevant and actionable for the organisation.
"Risk Management is not an isolated, discrete activity but a continuum of appropriate, actionable business practices" says Mr. C. K Guruprasad, Director – Marketing, Credence Analytics, "and our solution enables financial organisations to bring in this culture within the enterprise". Financial institutions want to build more efficient enterprise-wide infrastructures to address regulatory requirements and leverage these enhanced capabilities as a competitive weapon to create differentiating offerings with improved price and performance.
Credence Analytics is now offering FundMetrics with the online limits monitoring engine to the mutual fund industry. Please contact the undersigned for a demonstration of the solution.
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