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CIO - CRO Synergy Critical To Informed Decision-Making

Saloni P Ramakrishna, Principal Architect (Risk & Compliance Solutions), Oracle Financial Services Software, APAC, in conversation with explains the correlation between 'Risk Management' and 'Business Growth'.

How can risk management drive business growth?

Over time it is realised that better managed risks reciprocate with better returns. They improve the top-line and the bottom line.

The risk profile gives an overview of the low risk and high risk customers. For example, if the number of low risk customers are more, then offering them targeted products and doing more business with them would make more sense than with the high risk customers. This will bring in more quality business for the company, help in improving returns and adding to the top-line. This can be linked to the CRM solution, thus combining the customer's risk information into the CRM.

From a bottom line perspective, if the risk on the books is increasing, then the business with the high risk customers will also be accordingly reduced and the recovery process will speed up.

This has established a synergistic relationship between the CMO, CRO and CFO.

What is the importance of the CIO and CRO working in synergy?

The BFSI vertical is moving more towards five to ten year plans than historical analysis, driving the need for the CIO and CRO to work in tandem.

In order to get a single view of the customer, there should be a data layer followed by a reporting layer which unifies all the information in such a way that it becomes consumable by the end user. Then, there is a middle layer where you want to use frameworks over and over again. It is the responsibility of the CIO to structure this in a way that the information can be consumed by all.

Two of the biggest consumers of information going forward are the CRO and the CFO. They will need the data layer and a coherent information map across all applications. This leads to a symbiotic relationship between the CIO and the CRO. They are not seen as two different roles. There are no silos anymore and working together makes more sense now. The raw material for the CRO has to come from the CIO's organisation. The information from the CIO and the process information from the CRO have to go to the CFO for his capital planning.

There is a lot of interlinking between various roles which leads to people making better data based decisions.

How do you see Indian banks waking up to this change?

Banks have started unifying at the reporting layer or starting to unite at the data layer. Our regulators have made sure that under the Basel regulation a lot of information about contracts, transactions, products, collaterals is also asked for and collected and processed to provide a more integral view.

Banks are on their journey of creating the information repository and this will only get strengthened in days to come because of the newer operational and market risks getting added. So, information of a miscellaneous nature in varying granularities is getting added into the system. It's a trend where banks started on the credit side, they were always serving the markets, and now are adding operational risk and other information. India is definitely at par with other banks in the region on how information is being collated.

What is the single biggest challenge that CIOs in the BFSI vertical face?

The CIO is responsible for information. Today, data and information are two of the biggest assets with the bank, throwing the challenge of managing tons of structured and unstructured data in an integrated fashion.

The real challenge which has become more prominent along with other challenges is how to create a single data repository for all the analysis and how to ensure data accuracy and security. There is also a challenge in providing this data to the C level executives.

To sum up, the single biggest issue is how to get the data from multiple sources into one infrastructure and then to distribute it in a way that it can be consumed by multiple users.

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Updated Date: Feb 02, 2017 23:09:09 IST