Many banks still have so many systems that integration is a nightmare. Spaghetti style links predominate between physically unrelated components. Applications supplying exposure information, static data, transaction flows and business functions need to be seamlessly linked. The problem with interfaces is not only the physically dependence between systems but also converting data cleanly and accurately from one format into another. Organizations need to look at their total system needs and find an integrated solution that meets all of them.
Institutions require packaged solutions that are easy to interface into their existing systems.
This need is being driven by the rapid growth of new financial services and opportunities. Companies need to see the total exposure of a portfolio, across many different types of instrument, including hedges, collaterals, netting agreements, and so on. Market risk, credit risk, global credit limits, collateral management and operational risk requires sophisticated analysis but also strong portfolio management capability. Fully reconcilable market and credit risk calculations are becoming apparent, as institutions are required by the regulators to hold capital for both. Globalization strategies are important, especially for credit risk.