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IBM credit risk system targets banks

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It's obvious that risk management has stepped up in importance for banks, especially globally active banks. This is true at all levels, operational, portfolio, regulatory, and so on. Unfortunately, risk management processes have never been the industry's strong suit, which presents a terrific marketing story for vendors that play in this area.

IBM, for example, has launched IBM Signature Solution - Risk Management, a solution that "promises to aggregate and analyze data from all of those systems in order to deliver timely, risk-aware decision support and risk management. Meeting the latest Dodd-Frank and Basel compliance requirements is one payoff, but more important is making the most of available capital, confidently knowing that reserve requirements have been satisfied," according to Information Week.

"Banking is where manufacturing was 30 years ago," one executive was quoted. "At international banks, it's typical to see, between lending and capital markets, more than 100 systems where risk is tracked. In big U.S. banks, it may be 20 or 30 systems."

The total solution has been years in the making, aided greatly by adroit mergers. The solution is "based heavily on the technology" of Algorithmics, a Toronto-based developer of risk management software that IBM acquired in 2011. The new product also incorporates features drawn from IBM Cognos, FileNet ,IBM BigInsights, IBM DB2 (for data warehousing), and DataStage.

Obviously, other big ERP solutions providers will be active in this arena as well. The hype will continue to outrun the reality for now, but one hopes we're at the beginning of an ERP-like wave of investment.

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