Decision Support Systems and Financial Risk Assessment - An evaluative study

Abstract: Despite the prevalence of FDSS in practice, and despite their significance both to the institutions using them and the financial system in general, few scientific studies address this topic. No past studies have attempted to evaluate FDSS in a financial risk management context. The objective of this research is to provide knowledge into how such FDSS are used to support financial risk assessment at financial institutions, what considerations are important for such systems to be deemed successful and to identify gaps between the FDSS provided and the needs of financial institutions using them. For this purpose, I conduct an evaluative study of two systems used by the Swedish National Debt Office to assess financial risk. This evaluation is based on my own adaptation of the DeLone & McLean (2003) model of IS success; thereby creating a framework applicable to the assessment of FDSS supporting financial risk assessment. The resulting framework recognizes the importance of system repute and assurance in the evaluation of such systems; with user confidence bolstered by factors such as system transparency and knowledgeable service providers. I find that measurements of net benefit include systems' contribution to loss prevention and the organizations' general risk overview. Additionally, I find that net benefit measurement should consider systems' impact on organizations' operational risk. While some important factors remain inconclusive, my findings show that the FDSS evaluated at the Swedish National Debt Office are reasonably successful.