The report commends Algorithmics for its ability to offer multiple solutions across the enterprise risk management (ERM) spectrum and coverage across multiple asset classes and products, and says that 'its integrated offerings provide value for financial institutions looking for a cost-effective one-stop-shop for a range of risk and compliance solutions'. Chartis notes that vendors able to supply flexible and integrated risk management solutions that feature real-time business intelligence and analytics will be well placed to compete in this market.
Commenting on the results, John Macdonald, Executive Vice President, Algorithmics, said: âAlgorithmicsâ credit risk management solutions have long been recognized for their breadth and quality. However since the financial crisis, we have further enhanced and developed our solutions to meet our clientsâ new requirements for real-time, integrated enterprise credit risk solutions. For example, our latest CVA product is capable of calculating pre-deal incremental CVA in the front office, which is giving our clients a competitive advantage in their trading, and providing them with counterparty optimization options.â
According to the Chartis Research report, Algorithmics has achieved the top position for âcompleteness of offeringâ of its credit risk management solutions, which reflects Algorithmicsâ commitment to enterprise-wide integrated risk management. Chartisâ market assessment considered the following five factors: depth and breadth of functionality; flexible technology architecture; scalable sales and marketing strategy; ongoing innovation and implementation capability. Algorithmics was recognized for its strong performance with respect to Basel II, credit rating and scoring, trading book and banking book risk management, credit fraud, credit portfolio management, limit and exposure management and stress testing.
John Macdonald continued: âThe completeness of Algorithmics' credit risk solutions, recognized for three of the last four years, is the result of a decade of investment in our portfolio of credit solutions. Our clients are able to implement best practice methodologies across a broad range of credit risk applications. Our modular architecture is integrated within a single consistent framework and provides clients with a flexible approach that allows them to evolve their credit risk management systems according to their changing requirements and market needs.â
When projecting future industry development, the Chartis report notes that, âthe overriding objective of the larger vendors in the credit risk technology market should be the establishment of enterprise-wide risk management capabilities. These will provide a seamless integration of powerful data management, compliance and governance systems integrating all classes of risks (credit, market, operational) into a single point of knowledge for performance management. Integrated credit risk management and ultimately integrated risk management are coming into vogueâ.
Michael Zerbs, President and COO of Algorithmics added: âIntegration continues to be a key theme â across risk types, particularly market and credit, as well as across business lines and between front office and enterprise risk. 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.â