âWe have been looking at ways to extend the reach and use of the Algo FIRST external event database and to create linkages to key risk indicators.â says Penny Cagan, Managing Director of Algorithmics and manager of the Algo FIRST product. âWe are very excited about this joint effort as we believe it has enabled the development of a product that will enhance the use of external event data at a granular business line levelâ. She added: âThis is also a great opportunity to bring together two user communities and to expand the dialog concerning the management of operational risk.â
Ed DeMarco, RMA General Counsel and Director of Strategic Planning, said âWe are delighted to be able to offer this additional service to our existing KRI Library subscribers. We polled our subscribers in 2007 and this was one of the top additional services in which many subscribers expressed a strong interestâ.
âThis initiative also brings together two of the parties that have had the largest impact on the development of a language for Operational Risksâ DeMarco added. âRMA has tried to perform a pivotal role in the development of industry language. By creating a language that works for both the corporate and business line communities, the value of the risk management discipline is enhanced beyond just regulatory complianceâ.
The First 500 event service was designed and developed by RiskBusiness and is based on the same internet platform that supports the KRI Library. It draws on interest and user requirements collected from both the KRI Services subscribers and other financial institutions globally. The Algo FIRST database and its case study methodology was developed by Penny Cagan almost ten years ago and is supported by technology developed by risk software vendor Algorithmics. It is a repository of over 8,000 case studies of corporate governance, compliance, strategic and operational risk events. Approximately 100 financial institutions subscribe to the Algo FIRST database â many of whom also are subscribers to the KRI library.
Jonathan Davies, RiskBusinessâ Managing Director responsible for the Americas adds âBeing able to bring together on a common framework all relevant risk data sourced from inside or outside the firm, is a fundamental requirement for the future effective management of operational risks. This includes: Loss Data (both internal and external), RCSA exposures, output from Scenario deliberations and KRI selection processes.â
âAlso as the operational risk community looks to bring value to related internal initiatives in Audit and Compliance, external event data is highly valuable in assisting these communities in determining risk levels and by association the requirement for greater or lesser levels of oversightâ.