Risk analytics race ramps up with $387m sale of Fitch subsidiary Algorithmics
Acquisition set to boost IBM’s financial risk management portfolio as analytics become an increasingly higher business priority for the financial and investment sectors. September 07, 2011 | Wong Wei HanIn light of an increasingly difficult operating environment characterised by economic uncertainties and tightening regulatory conditions, financial institutions now find increasing value in having access to comprehensive data and analytics solutions as they seek to enhance their performance by properly assessing and navigating potential risks. Capitalising on the rising demand for financial risk management, technology companies are seen ramping up their capabilities in risk analytics, with Hewlett-Packard announcing last month that it was acquiring data-analytics company Autonomy. Similarly building up its portfolio in financial risk management is IBM, which announced on September 1st an agreement to acquire Algorithmics for $387 million. A subsidiary of Fitch Group, Algorithmics provides risk analytics, software, content and advisory services, which banking and investment clients typically employ to help develop better business decisions by analysing unstructured data, assessing risks and addressing regulatory requirements. The list of Algorithmics’ clients includes some major financial institutions, such as the Allianz Group, HSBC, Nomura Holdings and Societe Generale. The acquisitions of Algorithmics and British analytics firm i2 announced just last week mark the latest in a string of investments IBM has made in the past five year, during which IBM has spent over $14 billion on 25 acquisitions focusing on analytics. Laurence Trigwell, IBM’s global executive of business analytics for financial services, expects Algorithmics to help IBM better support its financial clients in meeting regulatory compliance requirements. “Regulators now require banks to hold increased amounts of capital to avoid government bailouts. This has created demand for stress testing, which is being used internally at banks.” Just as IBM strengthens its position in the financial risk management business, it will continue to face competition fro... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
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