Nigerian banks have been advised to utilise technology improve efficiency and effectiveness in risk management processes and stay competitive in the age of the FinTech.
The Senior Business Solutions Manager (Pre-Sales Risk Practice) of SAS, Charles Nyamuzinga, gave the advice during the SAS Risk & Finance Analytics Roadshow in Lagos.
According to him, as one of the most regulated industries in the world, banks are under pressure to not only comply with constantly changing regulations but also to modernise their systems, so that they can reduce compliance costs and be innovative on risk assessments during new product development, to better serve their customers.
Nyamuzinga said banks in Africa face additional challenges, including risk analytics skills shortages, data management issues and integrating their risk management and finance processes across the enterprise.
He however noted that these challenges can easily be eliminated with technology, adding that it will also help banks to advance the financial inclusion mandate across the continent.
He listed some of the current challenges banks are facing to include compliance with the new IFRS 9 accounting standard, which changes the way they calculate expected credit losses.
“There is also 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,” he added.
Other issues which banks are currently grappling with include incorrect modelling caused by data management and quality issues, skills shortages, drawing data from a number of disparate systems, credit loss calculations, and risk modeling amongst other issues.
“With solutions like SAS’s Risk and Finance Platform, none of these challenges are major issues anymore,” he said.
It will be recalled that SAS, which is a leading global analytics firm and a technological partner for banking institutions, has always played proactive roles 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 that allow banks to adapt more quickly to regulatory changes while minimising costs.