Algorithmics has again been recognized as a leader in credit risk management by Chartis Research. The Chartis report, Credit Risk Management Systems 2009, examines the demand and supply side for credit risk management systems and covers the key market and regulatory requirements, implementation challenges and the competitive landscape. It covers all of Algorithmics credit risk management solutions.
The report commends Algorithmics for its ability to offer multiple solutions across the enterprise risk management spectrum (ERM) and its coverage across multiple assets/products, and says that its integrated offerings provide significant value for financial institutions looking for a cost-effective one-stop-shop for a range of risk and compliance solutions.
The 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, says John Macdonald, executive vice president, Algorithmics. The key theme we see is integration 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.
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. Chartis 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.
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.’
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