Risk management budgets are growing in reaction to
mounting pressure to integrate financial risk management practices. As a
result, financial institutions have more money to spend on risk management
solutions. In addition to the main elements of a Basel II solution (like
capital calculators, reporting, data warehouses, and data management
tools), institutions will place greater emphasis on replacing
"peripheral" applications for activities in areas such as
asset/liability management, limits management, and credit scoring.
In a new report, Risk Management and Basel II:
Comparing the Financial and Credit Risk Solution Vendors, Celent
assesses offerings from seven vendors. The report examines the state of
the market for Basel solutions and the innovative vendors that are helping
institutions meet Basel II requirements. The report also examines the
lessons learned from the first-wave institutions that have purchased Basel
II solutions.
There are several vendors offering financial/credit
risk and Basel solutions from diverse backgrounds. Some vendors are
"new" to risk management, while others have functionality
covering multiple areas, which can sometimes make the market for solutions
confusing.
"Vendor and solution characteristics vary
significantly," says Cubillas
Ding, Celent analyst and author of the report. "Given
the substantial investments required of these projects, there is a
stronger drive for financial institutions, especially for those in
non-mandatory jurisdictions outside Europe, to better align risk
management ambitions, application functionalities, technology architecture
requirements, and vendor capability in various jurisdictions and business
lines," he adds.
"With the vendor solutions available today,
financial institutions have a range of options from selecting
best-in-class components to complement existing functionality, as well as
to form closer alliances with their vendors for Basel II compliance
development and management," adds Lauren
Bender, Celent analyst and co-author of this report.
Following the Celent report, Risk
Management and the Basel II Game: Market Updates at Halftime,
this new report focuses on the technology angle of Basel II solutions. It
is intended to be a preliminary guide for institutions planning
initiatives and evaluating vendors to prepare for the new Basel regime.
The vendors analysed in detail include: Algorithmics, Fermat,
i-flex Reveleus, Misys Almonde, SAP, SAS, and SunGard.
The 68-page report contains 27 figures and 14
tables.
