Celent predicts that the operational risk and compliance market will grow to $1.16 billon by 2009.
Risk-driven regulatory initiatives, like Basel II and the Sarbanes-Oxley Act, have significant momentum and are giving rise to new operational risk management practices, says the consultant.
By nature, operational risk issues are broad and diverse, affecting such areas as security, fraud, anti-money laundering efforts, data/document management, financial reporting, compliance management, straight-through processing, outsourcing, disaster recovery, and business continuity.
With regulatory requirements as fragmented as a map of Europe, institutions with larger footprints are forced to formulate a more integrated response and to cater to different operational risk and compliance requirement “flavours”. All these factors are changing the face of the market and creating uncertainties as well as opportunities for institutions and vendors alike.
In two related reports, “Operational Risk Management: Three, Two, One… Liftoff?” and “Operational Risk Management: Are Vendors Ready To Launch?”
Celent assesses industry dynamics, the progress of efforts, investment priorities, and solution strategies and makes recommendations for operational risk and compliance management. “The current state of affairs, where multiple flavours for operational risk initiatives exist, is beginning to change. Firms are increasingly looking to ‘rationalize’ regulatory initiatives across multiple jurisdictions. Practices adopted to comply with one regulation are ‘cross-pollinating’ to fit another regulation,” says one report.