Dodd-Frank Act: Standardize Risk Management Processes with SAP BusinessObjects Risk Management 10.0

  • by Judith M. Myerson , Systems Engineer and Architect/Owner
  • April 19, 2011
Ensure that your enterprise’s risk management procedures comply with the Dodd-Frank Act’s requirements pertaining to the management of systemic risks by using SAP BusinessObjects Risk Management 10.0. It supports the five phases of risk management.
Key Concept
The Dodd-Frank Act was signed into law in July 2010 in response to the 2007 US financial crisis. To mitigate adverse impacts on financial stability, the act focuses on systems and processes related to governance, risk, and compliance, as well as on better management of system risks. The act established the creation of the Financial Stability Oversight Council to identify system risks to large enterprises and to respond to emerging risks throughout the financial systems. It imposes new capital and leverage requirements to prevent financial institutions and nonbank companies from getting too big and too complex.

SAP BusinessObjects Risk Management 10.0 enables SAP and its users to interact with each other via a shared graphical view. This approach helps companies comply with systemic risk requirements established by the Dodd-Frank Act of 2010, which focuses on systems and processes related to GRC, as well as better management of systemic risks. It also encourages standardized risk management documentation. SAP BusinessObjects Risk Management 10.0 provides support for the five phases of risk management: risk planning, identification, analysis, response, and monitoring.

Application to Other Business Sectors

Although the Dodd-Frank Act is specific to the financial services industry, the identification of system risks and standardization of risk management processes is applicable to other industries such as pharmaceuticals, medical device manufacturing, and food, where health risks may require recall of products. Compliance with the act provides other leading GRC practices and benefits that include providing integration between information security and business processes, implementing an effective data breach response program, ensuring good data access controls, tracking changes in GRC regulations and policies, and continuous monitoring of inherent and residual risks that may change over time.   

Risk Management Programs

SAP BusinessObjects Risk Management allows SAP and its users to interact with one another on common views of risks and responses. SAP BusinessObjects Risk Management’s graphical view provides a visual workbench to model risks and their relationship to business impacts and responses and to communicate them to SAP.

Judith M. Myerson

Judith M. Myerson is a systems architect and engineer and an SAP consultant. She is the author of the Enterprise System Integration, Second Edition, handbook, RFID in the Supply Chain: A Guide to Selection and Implementation, and several articles on enterprise-wide systems, database technologies, application development, SAP, RFID technologies, project management, risk management, and GRC.

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