The financial services industry really could have used this a couple of years ago.
IBM Wednesday unveiled a series of new applications and services for measuring and managing risk in day-to-day operations and in specific areas such as managing credit portfolios. The announcements include a new credit risk analysis solution for the banking industry from Cognos, the business intelligence software vendor IBM acquired in January.
IBM described the new Cognos software as part of a larger initiative to provide products and services that help businesses track, measure and manage risk.
Managing risk has moved to the top of most business executives' priority lists given the sagging economy and endless news reports about tighter credit restrictions and limited visibility into businesses' risk exposures, said Frank McKeon, director of North American banking industry at Cognos.
Cognos unveiled the IBM Cognos 8 Banking Risk Performance " Credit Risk analysis application at the Bank Administration Institute (BAI) Retail Delivery Conference & Expo in Orlando, Fla. The package, which includes reports and analysis tools, is built on the Cognos 8 business intelligence platform and taps into data stored in the IBM Banking Data Warehouse system.
The analytic application can be used to monitor the volume and characteristics of new loan originations, such as credit scores, across a portfolio; analyze front-end loan performance such as loan delinquencies and back-end performance items like foreclosures and bankruptcies; measure financial oversight and profitability using net interest margin, risk-adjusted return on capital and other metrics; and comply with Basel II reporting requirements.
The IBM Cognos 8 Banking Risk Performance " Credit Risk software is part of Cognos' financial risk management product line, which, in turn, is part of IBM's Information on Demand portfolio. The application package will be available in mid-December and McKeon said Cognos is counting on solution providers with expertise in risk management applications to help sell the product.
The company also unveiled Enterprise Risk Management Workbench, developed by IBM Research and Global Business Services, which businesses could use to assess the maturity of their risk management processes and their readiness for specific "risk events," such as inadequate succession planning, shortages of key skills, loss of intellectual property and failures by key suppliers. In addition, the new Risk and Compliance Analysis Tool from the IBM Global Business Services Center for Business Optimization uses behavioral analytics and deviation detection to identify potentially risky business transactions.
