Consultants Capco have sold the intellectual property rights in its operational risk management application to Bangalore-based payments software provider i-Flex.
i-flex is buying the intellectual property rights for Capco’s Operational Risk Tool Suite (ORTOS). It will merge ORTOS with its own Reveleus Risk Analytics applications to create an enterprise-wide risk management product. i-flex will continue to sell and implement ORTOS independently and Capco will serve as its re-seller and distributor.i-flex will continue to support and enhance ORTOS for existing customers (among them Dresdner Bank and ABN AMRO). i-flex will also take over the delivery, support and future product growth of ORTOS.
“Together, Capco and i-flex have the capability to build exceptional products and provide specialized consulting – a combination that will greatly benefit our customers given the changing dynamics of the regulatory environment,” says R. Ravisankar, CEO – International Operations and Business Development, i-flex Solutions. “Additionally, this agreement enhances i-flex consulting and Reveleus’ range and depth of risk capabilities.”
Capco will now also be i-flex’s preferred Operational Risk consultancy partner. Capco and i-flex Consulting will collaborate to offer consulting in operational risk strategy formulation, product selection, implementation and process advisory services.
i-Flex says ORTOS meets the Basic, Standardized and Advanced Measurement Approaches for operational risk management set by the authors of the Basel II capital adequacy regime, and that it complements the Reveleus Basel II compliance application well. “Combined with Reveleus’s Basel II credit risk and capital calculation engine, the solution will enable financial institutions to rapidly meet Basel II compliance,” says an i-Flex spokesman.
“I applaud i-flex for thinking out of the box, as this acquisition truly leverages the complementary strengths of i-flex and Capco to reach customers through a potent combination of professional expertise, IT product management, and global reach,” says Predrag Dizdarevic, Executive Vice President, Capco, and Head of Capco Solutions. “As the need for institutions to manage operational risk compliance increasingly matches that of credit and market risk, we see a 12-18 month window to take the level of sophistication and flexibility of ORTOS to the next level and accelerate the delivery of advanced functionality to greatly enhance its benefits to customers.”
Capco claims that ORTOS includes all components needed to cover the regulatory and management operational risk mandates for all banking institutions, regardless of size. It has a modular framework that aims to address loss data collation, self assessment, monitoring of risk indicators, tracking of issues and action plans, and calculation of economic capital along the Advanced Management Approach (AMA) (both on the basis of loss data and scenario based self-assessment) as well as fulfilling the requirements for both Standard and Basic Approaches. In addition, ORTOS includes a mechanism for ad hoc management and regulatory reporting.
Reveleus aims to help banks manage enterprise risk and meet compliance requirements by providing them with a set of rules, computation engines, business definitions and underlying data structures. Reveleus recently won orders from Bank of Montreal in Canada and from Ta-Chong Bank in Taiwan for its Basel II solution.