News & Resources

Balance sways between regulation and technology applications

Oct 11, 2011 Walt Wojoiechowski

Regulations enacted over the past few years in the finance sector have trended toward an interest in mitigating risk. The problem, experts hold, is that the lending and investment practices that led up to the 2008 financial collapse were excessively risky and focused on short-term gain. Now, laws such as the Dodd-Frank Act are intended to impose new risk management standards on banks and investors. A report released Tuesday by Clear Path Analysis finds 49 percent of buy-side traders believe regulation will be the most significant anticipated change to operations in coming years. More importantly, firms are beginning to address ways that technology can help automate or augment risk management procedures, specifically in regards to operations for hedge funds, private equity, traditional fund managers and DC pension schemes. "Impending financial reform generates a level of uncertainty, but can be seen as either a threat or opportunities," said Sylvain Privat, a product manager at Misys Sophis. "By improving the technological infrastructure of a firm, investment companies can more easily control costs, manage risk and enable thoughtful decision making to ensure firms are able to capitalize on new business opportunities as they arise."