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Rapid Data Growth and Stress Testing Cause Problems Across Europe, Surveys Show

Debate across Europe over debt crises, austerity measures, bail-out funds and credit ratings make it easy to forget that the region’s financial institutions are on the same page about stress testing and regulation, as well as data growth and latency. Results of a recent Sybase survey released Tuesday serve as a reminder.

Rapid growth of data is a challenge to risk and compliance management, said nine out of ten capital markets executives polled at the Sybase FSI Summit in Frankfurt last month. And stress testing has not addressed all of the important risks to the banking system, according to 82 percent of them.

Germany FSI Stealth Survey01-18-12Some results were similar to a survey carried out at October’s Sybase Financial Services Executive Summit in London. For instance 90 percent of German respondents predicted that Basel III regulations will have a “moderate” to “significant” impact on bank profitability, down slightly from a combined 98 percent of those surveyed in the U.K. And more than half of those polled in both countries expected data latency issues to consume the most significant portion of company resources.

“There is a significant amount of uncertainty and concern among participants in the capital markets community over the current state and future outlook for the industry,” Sybase’s Dusseldorf-based managing director Theo Ruland said in a statement. “These results don’t come as a surprise to us based on the continual feedback we elicit from our customers.”

Despite relative agreement on the inadequacy of stress testing, one difference in the results centered on these annual examinations of the E.U.’s largest lenders by the European Banking Authority. While 32 percent of respondents in Germany indicated that stress testing should occur at least twice a year, 84 percent of those surveyed in the U.K. said the assessments should take place semi-annually.

The first Sybase FSI Summit in Frankfurt provided an environment in which capital markets leaders could get up to speed on the latest technologies, strategies and trends in Germany’s financial markets. Sybase hosted the event and conducted the study.

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  1. [...] Despite their afore registered lack of confidence in the system, almost half of the North American respondents (46 percent) indicated that stress testing should take place at least once every six months. More impressive, 68 percent of those surveyed in EMEA and 60 percent in APAC also preferred semi-annual testing. The figure was 84 percent in the U.K. [...]

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