Risk management analytics: Turning uncertainty into opportunity

Today’s financial services landscape requires sophisticated enterprise risk management approaches to address evolving regulations, market volatility, and shifting customer expectations. Outdated systems and fragmented data create barriers to effective risk oversight, preventing institutions from gaining comprehensive insights.

In a recent webinar, Risk management analytics: Turning uncertainty into opportunity, we explored how financial institutions are reimagining risk analytics through digital transformation with solutions available in AWS Marketplace. We also discussed strategies that convert risk functions from defensive necessities into competitive advantages.

Craig Vogel, Associate Vice President, Cross Asset Derivatives Trader at Fortitude Re, and Arsen Arutyunov, Vice President of Sales – Americas at Numerix, shared their experiences with risk transformation initiatives.

Navigating regulatory complexity in financial services

Industry experts from Deloitte and Ernst & Young emphasize that effective risk frameworks begin with strong governance. These leaders underscore the need for financial services firms to develop adaptive strategies that integrate comprehensive cybersecurity measures, anticipate evolving customer expectations, and create resilient approaches to emerging market uncertainties.

Progressive organizations move beyond reactive approaches with analytics-driven methodologies. They deploy integrated solutions that unify information sources, deliver timely insights, and facilitate predictive modeling. This shift positions risk management as a value creator rather than merely a compliance function.

Real-world examples of customer success

In the webinar, we explore three compelling case studies that show how financial services organizations are transforming their operations to improve how they manage risk.

Enhancing customer intelligence with SAS

Toyota Financial Services Italia recognized the need to reimagine their approach to customer data, which was previously trapped in disconnected silos that limited their ability to personalize experiences and manage risk effectively. They turned to SAS for support.

By implementing SAS Viya, Toyota Financial Services Italia reinvented their data strategy, centralizing fragmented customer information into a secure, unified repository. This transformative approach allowed them to completely reimagine how they view and understand their customers.

Leveraging advanced machine learning capabilities, their Information Technology (IT) analytics department launched innovative predictive models to uncover hidden patterns. These models transformed isolated data points into a comprehensive intelligence platform, enabling the team to reimagine the potential of their customer insights.

The reimagined approach yielded impressive results:

• Improved customer experience through data-driven personalization
• Targeted retention strategies that predict customer churn with unprecedented accuracy
• Foundations for comprehensive risk management
• Innovative pathways for addressing evolving compliance requirements

Toyota is now poised to further reinvent their business intelligence, with plans to develop advanced models for risk forecasting and capital allocation. They are building a visionary data culture where precise, reimagined information supports every critical business decision through the SAS Viya platform.

Revolutionizing compliance workflows with Smarsh

A leading global financial services company managed regulatory compliance with multiple vendors for electronic communications. This approach wasted time and money while limiting their ability to extract insights from communication data.

Smarsh Enterprise Platform consolidated their company’s solution and transformed their compliance operations. By switching to a single vendor, the company gained significant benefits across compliance, IT, and investigations teams.

The implementation delivered impressive results:

• $7 million in annual cost savings through vendor consolidation
• Significantly improved investigation efficiency
• 70% reduction in false positive alerts through AI-powered surveillance
• Expanded foreign language coverage for global compliance
• New revenue opportunities from communication data insights

Find additional insights and strategies in our Risk management analytics: Turning uncertainty into opportunity webinar to help transform your risk management operations.

Transforming derivative trading operations with Numerix

Fortitude Re built a comprehensive risk management system with Numerix that spans multiple asset classes. Starting with just three employees managing variable annuities, they needed analytics beyond their internal capabilities.

“By having the liability move in Numerix, we can produce a tighter hedge as opposed to hedging from beginning-of-day risk,” explains Craig Vogel. “I can hedge my liability risk as of 3:00 PM EDT and reduce the mismatch with high accuracy.”

The implementation consolidated trade operations and ensured accurate data synchronization across front and middle offices. The team now accesses intraday data to quickly assess positions and execute hedges throughout trading hours.

Leveraging cloud-native solutions for enhanced infrastructure security

Numerix’s cloud-native solution on Amazon Web Services (AWS) eliminated Fortitude Re’s need to hire 15-20 people to manage infrastructure. The Software as a Service (SaaS) approach provides a secure, controlled environment with strict security standards matching Fortitude Re’s own requirements.

The single-tenant SaaS offering provides enhanced controls through a two-person approval matrix for trade verification. This system maintains strict permissions and prevents unauthorized manipulation, to ensure data integrity and security.

“From their perspective, they’re getting an immensely powerful seamless user experience,” explains Arsen Arutyunov. “So, for them it’s just a streamlined experience. That’s really the goal here.”

Watch Risk management analytics: Turning uncertainty into opportunity to learn strategies from Fortitude Re and Numerix to enhance your organization’s risk operations while reducing infrastructure costs.

Expert perspectives on risk transformation

The webinar featured insights from practitioners who have successfully navigated risk management modernization. Their discussion revealed valuable lessons for organizations embarking on similar journeys:

• The critical role of executive support for transformation initiatives
• Practical strategies for balancing innovation with regulatory compliance
• Methods for maintaining data security while enhancing analytical capabilities
• Approaches for demonstrating risk management value

These experts shared candid perspectives on challenges and success factors for deploying risk management solutions available in AWS Marketplace.

Conclusion

Financial services organizations gain significant advantages when they modernize their risk capabilities. The case studies of Toyota Financial Services Italia with SAS, a global financial institution with Smarsh, and Fortitude Re with Numerix demonstrate the power of analytics.

These organizations centralized data, implemented real-time analytics, and automated key processes. They reduced costs while improving decision quality and gained better visibility into risk exposures. Most importantly, they transformed risk management into a strategic function that creates business value.

AWS Marketplace provides access to these and many more powerful risk management solutions, enabling financial institutions to implement proven technologies using streamlined procurement.

About AWS Marketplace

AWS Marketplace is a digital catalog of third-party software, services, and data that simplifies how financial services and insurance organizations find, buy, deploy, and manage software on AWS. With over 20,000 partner offerings across more than 70 categories deployed in 31 regions globally, AWS Marketplace helps customers transform their software supply chain.

AWS Marketplace offers flexible pricing options including free trials, pay-as-you-go, and enterprise discount programs. Multiple deployment options help customize software provisioning to fit security policies and licensing terms. According to Forrester, finding, buying, and deploying solutions through AWS Marketplace takes approximately half the time compared to other sales channels.

Visit Financial Services Solutions in AWS Marketplace to discover a variety of financial services and insurance solutions like the ones discussed from Numerix, SAS, and Smarsh.

Watch Risk management analytics: Turning uncertainty into opportunity to learn more about these topics or discover additional insights from the panel discussion.

About the author

Shaheen Kanda serves as the Financial Services Technology Partnerships and Cross Industry Marketplace Leader at AWS. She works with financial services organizations to identify and implement innovative solutions that address their unique challenges, with a particular focus on risk management, compliance, and digital transformation. Before joining AWS, she founded two FinTech startups and spent a decade working as a leveraged finance banker in New York City.