Risk Profitability Analysis

Risk profitability analysis has become one of the most talked-about buzz-words in the banking community lately. But what does it mean? With all the major investments in technology the banking industry has made to handle current challenges like externally-imposed compliance and risk management requirements, you would think that risk profitability analysis is under control. But although financial services technology has made great advances in both profitability management and risk management, the two capabilities have not been integrated effectively. Until now. And not surprisingly, it is Cognos which has addressed the risk profitability analysis issue effectively and efficiently.

Cognos Focuses on Risk Profitability Analysis

Joining forces with IBM, Cognos has made integrated risk management and financial profitability planning a reality. With over 1,000 retail, corporate, and investment banking institutions using Cognos software worldwide, Cognos is the logical source for a risk profitability analysis solution. Partnering with IBM, which has 95% of the world's largest banks as customers, simply increases the Cognos ability to help financial services organizations to manage and reduce risk, address compliance issues, and improve overall financial performance and profitability.

Cognos Integrates Risk Management and Profitability Analysis

The main element of the Cognos solution is the integration of risk management and profitability planning capabilities to maximize risk-adjusted return on capital (RAROC). Software and blueprints created with the combined Cognos and IBM expertise provide risk-adjusted modeling of multiple business scenarios that integrate risk measures—RAROC, economic capital, probability of default, loss given default, expected loss—to enable banks to react quickly to changing market dynamics. Aligning the risk management and financial profitability silos also allows banking organizations to extend the value of their existing investments in information technology. Altogether, the Cognos solution incorporates the full performance management capabilities that Cognos customers worldwide rely on—dashboards, reporting and analysis, planning and forecasting—to confront the challenges of risk-based profitability management.

Learn more about Cognos solutions for risk profitability analysis in banking here.