Business intelligence for operational risk

July 2004 Information Security

Only organisations concerned about one, very specific operational risk, such as money laundering, can afford to invest in a niche business intelligence (BI) product. Businesses with broader vision must think beyond niche products.

"Investing in a best-of-breed anti-money laundering (AML) product, for example, is fine - if that is where your vision stops," says Kerry Evans, general manager: Financial Services at SAS Institute SA, a specialist in business intelligence. "However, those with bigger vision would do better to invest in solutions that can expand to address the entire risk spectrum."

Money laundering is just one example of the risks facing large organisations. Another is fraud, yet fraud itself is merely one of a number of areas enterprises must focus on in terms of operational risk. Others include financial management, human resources, physical security and IT management.

"Organisations trying to mitigate against operational risk should not choose a number of different niche vendors, but should rather partner with one stable vendor who can offer tried and tested solutions across all risk areas," Evans continues.

The crux of any risk management strategy is extraction of high quality data from a number of different source systems. Once it has been tested for quality, the data must be taken to a staging area, such as a data mart, from where it can be analysed, and the results disseminated.

"This chain of processes, which SAS calls the Intelligence Value Chain, is key to any business intelligence strategy," says Evans. "An enterprise could invest in best-of-breed niche products in each of these areas, for example, data extraction or data cleansing. SAS's solutions, however, are ranked within the top three in each of these key areas by leading analysts and research organisations, making it more sensible to go end-to-end SAS. Organisations thus benefit from best-of-breed as well as a holistic solution. With one solutions provider, organisations also alleviate integration, version differences and support risks."

A common metadata layer should span the entire business intelligence platform. Metadata enables an organisation to trace back, audit or repeat any transaction. The SAS 9 metadata framework delivers the power to integrate, share, centrally manage and leverage metadata - including information about data sources, content, business rules and access authorisation - across the entire Intelligence Value Chain.

"Compliance legislation now requires financial and other institutions to keep terrabytes of information about their customers for a number of years," Evans adds. "This makes the need for a scalable, robust infrastructure even greater. Other vital issues to consider are integration, interoperability and manageability."

SAS enables businesses to tackle major legislation, such as Basel II, in bite-sized pieces. Thus, SAS can be introduced according to a strategic three- to five-year plan for companies with strategic vision.

For more information contact Michelle Chettoa, SAS Institute, 011 713 3400, www.sas.com/sa





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