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Risk management and the cloud

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In the financial services world, both regulatory changes and increasingly complex, data-intensive modeling are creating challenges for risk teams. In Canada and around the world, regulators are mandating increased compliance, capital adequacy and reporting requirements to avoid systemic risk, improve transparency, and make markets safer for investors. Increasing electronic trading volumes and complex financial products are additionally creating high levels of risk at financial institutions. At many organizations, current digital infrastructure and systems are unable to cope with growing business demands.

With the cost of delivering on-premise becoming prohibitive, Heads of Risk are looking to cloud computing and AI for agility, compute power and real-time analytics

Manage risk across your organization with cloud-computing

Banks and financial institutions use high-performance computing (HPC) to calculate both risks and profits. Working with the right partner is a central and often decisive part of their strategy. As an industry leader in financial services, Microsoft Azure has become the cloud service of choice for the banking and financial sector, serving more than 80% of the world’s largest banks and over 75% of the global systematically-important financial institutions. Digital transformation is a key driver of competitive advantage, and legacy on-premise HPC can’t compete with the scalability and flexibility of a cloud-based solution. With cloud platforms capable of assisting with risk analytics, trade valuation services, and predictive modelling, financial institutions around the world have turned to Microsoft to improve business agility, reduce costs, and gain a competitive edge.

UBS, the world’s largest wealth management company, has turned to Azure, the Microsoft public cloud platform, to power its own digital transformation, aiming to reduce dependency on legacy technology. Microsoft financial services compliance program, which allows firms and regulators to deeply examine Microsoft cloud systems, services and processes, was one of the key appeals for UBS. Regulatory compliance isn’t the only advantage provided by Azure. UBS also saw significant results on its risk-management platform: speeding calculation time by 100%, saving 40% in infrastructure costs, and gaining almost infinite scale time within minutes.

There are more signs that savvy financial institutions are moving away from managing their own infrastructure. TD Securities uses its xVA software to price complex derivatives products. The software requires massive computing power. With Microsoft Azure, TD Securities has addressed performance complexity while also keeping infrastructure costs low. The team can now focus on client service and solution development.

Drive agility with regulatory risk

As trade volumes have increased, managing risk is a top priority for banks and securities traders. A technology leader in the securities business, Mitsubishi UFJ Financial Group (MUFG), decided to move its on-premises, high-performance computing (HPC) grids to Azure. Microsoft HPC Pack gives the team control of the data and the models without the extra work of managing the infrastructure. MUFG saves millions of dollars in servers and datacenter space, while leveraging the agility and scalability of the cloud to support risk management.

Learn more about how Banks and financial institutions are embracing the opportunities offered by cloud-based solutions to respond to market needs quickly and with better insights: visit Microsoft Risk Management Solutions.