DnB NORD selects FinArch's Financial Studio for global Basel II compliance

Ghent/Copenhagen - 23 January 2007

FRP platform to provide solid basis for enterprise-wide framework

Financial Architects (FinArch), international provider of a Finance Resource Planning (FRP) platform for the finance industry, today announced that Bank DnB NORD, a joint venture between Norwegian DnB NOR and German NORD/LB Norddeutsche Landesbank, has selected Financial Studio as the core platform to answer its capital management and MIS requirements.

DnB NORD started its operations in January 2006 and has a strong presence in North Eastern Europe. The implementation of Financial Studio will embrace the whole DnB NORD organisation in the Baltic region, including Denmark, Estonia, Finland, Latvia, Lithuania and Poland. The project will be executed in subsequent phases to produce first productive results within a minimum of time. The major focus in the first phase is to ensure that DnB NORD complies with the Basel II provisions by 1 January 2008, following the Standardised Approach.

Subsequently the adoption of the more advanced IRB Approach to credit risk is scheduled, as well as the introduction of RAROC functionality and an economic capital model. At the reporting side, COREP reporting is fully covered, while consolidated figures will be reported to the parent company DnB NOR in Norway.

The bank started a software evaluation project early 2006. The project evaluation team, led by Bastian Libal, Head of Risk Control, assessed the competing proposals on the basis of their functional coverage in the areas of risk management, profitability calculations and regulatory reporting for capital adequacy - Basel II. A well-developed and mature data model was the bank's prime prerequisite, as a solid base for its planned risk and finance data warehouse.

DnB NORD decided for Financial Studio for multiple reasons : Financial Studio offers broad and deep risk management and MIS calculation and reporting functionality, which ensure the bank to be regulatory compliant. At the same time, the Financial Studio Finance Resource Planning (FRP) platform provides a direct option to expand usage into other areas, both functionally (such as accounting and IFRS) and geographically.

Bastian Libal, Head of Risk Control at DnB NORD comments "In choosing FinArch, DnB NORD made a decision in favour of a financial engineering company capable of providing extensive experience in implementing banking solutions in an international environment. Financial Studio gives DnB NORD the opportunity to base the diverse IT, methodology and reporting landscape on one common platform. Apart from the Basel II compliance solution DnB NORD plans together with FinArch to further improve the risk- and profit control by implementing the rich functionality of the MIS module. We are very much looking forward to continuing the productive relationship with our colleagues from FinArch."

Nigel Lee, VP Global Business Development says "Financial Studio is the perfect tool for DnB NORD as it provides a low cost of entry, because of its modular structure, and equally offers high scalability in terms of volume and functionality. We believe that our proven competence and professionalism have convinced the bank to work with FinArch; the experience and expertise that we gained at similar projects in Europe, North America and the APAC region will give them a head start. We from our end are delighted to be working with the DnB NORD team."

Financial Studio's capital management solution comes with an extensive range of functionality to address the requirements of Basel II, RAROC, economic capital and other risk-related performance measurement ratios. It provides a totally integrated capital and risk management solution that delivers comprehensive support for enterprise-wide credit, market, and operational risk management, ensuring compliance with external regulations. Organisations will maximise the investments made to meet the immediate short term requirements, while at the same time building a comprehensive capital framework and enterprise risk management platform with superior internal controls.

The combination of Financial Studio's Basel II solution with profitability calculations delivers an integrated platform for the implementation of an enterprise-wide strategy for RAROC. This provides the basis for effective economic capital budgeting and incentive compensation at the business-unit level, allowing to measure a business unit's contribution to shareholder value, and to assign capital to business units after determining the risk-adjusted rate of return and, ultimately, the economic added value of each business unit.

The Financial Studio FRP platform embraces accounting, risk management, MIS and compliance solutions, and is used by numerous financial institutions worldwide. FinArch is also positioned by Gartner, Inc. in the leaders quadrant in the Magic Quadrant for Basel II software applications. The company's focus coupled with a solution that can be scaled to meet broader corporate performance management, has thus been recognised by the global financial markets.

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