Lack of standardization in the reporting process will be a major hurdle in complying with Basel II requirements for financial institutions, according to FRSGlobal. Of the more than 100 financial services and compliance professionals who participated in a recent online survey conducted by the Boston-based provider of risk and regulatory compliance reporting solutions, 41 percent indicated that the standardization of their business reporting processes was insufficient; 17 percent reported that standardization is completely non-existent within their firms.
Basel II, which is scheduled to be implemented in 2009, will require firms to report on operational risk at varying levels of complexity. But measuring operational risk within the terms outlined by the rule will require standardization of data and reporting, FRSGlobal says.
"Failure to [take a strategic view of the compliance reporting process] can leave banks trying to integrate manual and automatic processes across business lines and regions, which can actually increase the operational risks they are seeking to measure," said Andrew Liegel, product management specialist at FRS Global, in a release. <<<