Achieving BASEL II compliance from an IAM Perspective

Basel II - The New Capital Accord is bound to have a significant impact on organizations in the finance sector, having and conducting business in Europe and companies operating in other parts of the world with headquarters in Europe. BASEL II, has a direct impact on the banking segment with a majority of the banks being affected by risk-focused Basel II capital adequacy rules.

Basel II is more about effective risk management and business processes than compliance. Enterprises have to come to the table from a perspective on how assets, liabilities, finance related transactions, accounts, users and others can be managed more effectively, thereby adhering to Basel II guidelines.

Basel II aims to improve the consistency of capital regulations internationally, make regulatory capital more risk sensitive, and promote enhanced risk-management practices among large, internationally active banking organizations.

The Basel II Capital Accord, developed under the aegis of the European banking supervisory organization, requires financial institutions to assess credit risks and operative business risks. The Accord stipulates the holding of reserves, the size of which are commensurate with the risks assessed. The costs of these reserves form part of the business case in considering whether and which IT tools should be used for risk minimizing measures.

IT as an enabler for effective systems management in banking and financial enterprises, makes a huge difference for effective assessment and measurement of risks, as well as process consistency and the use of generally accepted control frameworks. IAM solutions help administrate and track access to enterprise wide systems to detect and prevent non-compliance.

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