IBM on Monday rolled out new software that allows banks and other financial institutions to connect data repositories strewn across the enterprise, allowing them to integrate, manage, and analyze data generated by their customers.
Meeting the guidelines set down by the upcoming Basel II Capital Accord mandating updated international banking regulations, IBM's Risk and Compliance product can cut down the time it typically takes to identify and reconcile discrepancies in banks' business records from weeks to hours, company officials said. It can do this through its ability to provide a single and integrated view of disparate data sources across the enterprise, they said.
Being able to connect repositories and other unconnected pockets of data through the technology also makes it possible for banks to more accurately gauge future profits, to better position newer products and services to their customers, and to better manage the investment and allocation of assets, company officials said.
The new offering also aims to help banks manage the information requirements associated with the Basel II, including recording, accessing, presenting, and analyzing several years' worth of customer and operational data in a customized way. For instance, for the first time Basel II will ask banks to evaluate the default rates of old loans to customers in a specific industry or geographic location. The Risk and Compliance product helps trace the source of information originally used to determine the risk of loans, and then correlate it to the outcomes of those transactions.
IBM officials look at the Risk and Compliance product as a major opportunity to leverage some of its business intelligence technology to address some of what they see as thorny technical and business issues associated with Basel II.
"When we looked at the pain points users have around Basel II, we recognized we could do something different. So we used our Enterprise Data Warehouse Reference Architecture, which is built on DB2, pSeries servers, and the Total Storage Enterprise Storage Server," said Karen Parrish, IBM vice president in charge of business intelligence. "We then built the Data Warehouse Edition and coupled that with our Banking Data Warehouse, on which banks run their operational business."
Parrish said IBM could have addressed the problem using just its Enterprise Warehouse application to handle all of the regulatory compliance around Basel II. But the solution the company decided on was more appropriate given the amount of data the Basel II standard was asking banks to accommodate, along with the more sophisticated analytical capabilities they typically require.
But with products such as Risk and Compliance, Parrish believes IBM can also push business intelligence technologies further down inside an organization where it can address a wider range of problems.
"We honestly believe that the BI of the past was really designed for a subset of users in an enterprise who understood deep analytics, the PhDs in analytics," Parrish said. "But our view is you can't solve business problems unless we move (BI) closer to the user, and that is where our investments are going."
Many of the implementations of IBM's new product will be carried out by its Business Consulting Services group and a range of business partners specializing in dealing with financial institutions.
The Risk and Compliance offering available immediately and carries with an entry-level price of approximately US$350,000, according to the company.
For more information about Risk and Compliance, users and developers can go to http://www.ibm.com .