BPM for Basel II: Compliance and Process Management
Basel II, or The New Accord (based on the original Basel Accord), was created to improve the way financial organizations and regulators approach risk management. Its goal was to revise the international standards for measuring capital and to introduce a more formal approach to measuring and managing operational risk. It is based on three pillars:
1. Minimum capital requirements
2. Supervisory review
3. Market discipline
Basel II asks organizations to implement a corporate risk management system that accounts for operational risks. Basel II requires financial organizations to set aside regulatory capital for operational risk – an important development that affects most financial service institutions worldwide.
From a Business Process Management (BPM) perspective, the standards of Basel II have increased pressure on:
• tracking capital adequacy,
• measuring and maximizing profitability, and
• streamlining systems.
A clear Business Process Management (BPM) framework will allow you to easily design processes and develop the strategic measurement necessary to ensure proper performance and reduce operational risk across your organization.
The Enterprise Process Center (EPC) – A Turnkey Compliance Solution
In addition to meeting Basel II requirements and all other standards for risk management, the EPC offers versatile profitability analysis, fully integrated performance measurement, and better planning capabilities. Your organization benefits from:
• Lower capital reserve requirements
• Lower credit risk and losses
• Extended risk-adjusted pricing
• Better reporting of exposures
• Better processes, controls and more effective cost management
• Clearer compliance reports