The report commends Algorithmics for its âability to offer multiple solutions across the enterprise risk management spectrum (ERM) and its coverage across multiple assets/productsâ, and says that its âintegrated offerings provide significant value for financial institutions looking for a cost-effective âone-stop-shopâ for a range of risk and compliance solutionsâ.
Commenting on the results, John Macdonald, Executive Vice President, Algorithmics, said âThe recent market turmoil has demonstrated that banks with integrated, forward-looking market and credit risk management frameworks have generally fared better than those without these frameworks. The key theme we see is integration â between market and credit, across the business lines, and between front office and enterprise risk. Banks are actively seeking new tools, risk processes and systems to help them understand and manage the risk concentrations that impact all businesses, especially in a market crisis when correlations increase. In addition, through the consistent and systematic application of counterparty level CVA, banks are incorporating the pricing of credit risk into the pricing of derivative transactions leading to a more comprehensive pricing and capital management approach.â
According to the Chartis report, Algorithmics is assessed to have a leading credit risk management offering, which is a reflection of the fact that its business is dedicated to risk management. Chartisâ market assessment considered five factors: depth and breadth of functionality; flexible technology architecture; scalable sales and marketing strategy; ongoing innovation and implementation capability. Algorithmics was noted for the strength of its functionality, for its international sales and marketing channels and for its flow of new product innovation over several years.
John Macdonald continued: âThe completeness of Algorithmics' offering, recognised in the report, means that institutions can work towards best practice methodologies within a single, consistent framework - beginning with the building blocks of sound credit risk management and evolving over time to incorporate the most advanced practices and risk measurement techniques.â
Looking forward, the Chartis report notes that 'the overriding objective of the larger players in the credit risk technology space today should be the establishment of enterprise-wide risk management capabilities... These will provide a seamless integration of robust data management, compliance and governance systems integrating all classes of risks (credit, market, operational) into a single point of knowledge for performance management.'
Michael Zerbs, President and COO of Algorithmics added: âAlgorithmics has always had a strong focus on enterprise risk management. Integrating risk data, processes and analytics within all levels of risk decision-making enables financial institutions to evaluate new business opportunities, set risk-based pricing, and manage portfolios in an efficient and rational manner, enabling the bank to target exposures that provide the best return relative to risk. As the major wave into total integration, predicted by Chartis, rolls forward, Algorithmics continues investing to extend its leading role in this market.â