Operational Risk Management: Are Vendors Ready to Launch?

by Cubillas Ding, July 17, 2006

Abstract

London, United Kingdom July 17, 2006

Operational Risk Management: Ready to Leave the Launch Pad?

Celent predicts the operational risk and compliance market will grow to $1.16 billon by 2009.

Risk-driven regulatory initiatives, like Basel II and the Sarbanes-Oxley Act, have significant momentum and are giving rise to new operational risk management practices. By nature, operational risk issues are broad and diverse, affecting such areas as security, fraud, anti-money laundering efforts, data/document management, financial reporting, compliance management, straight-through processing, outsourcing, disaster recovery, and business continuity.

With regulatory requirements as fragmented as a map of Europe, institutions with larger footprints are forced to formulate a more integrated response and to cater to different operational risk and compliance requirement "flavours." All these factors are changing the face of the market and creating uncertainties as well as opportunities for institutions and vendors alike.

In two related reports, Operational Risk Management: Three, Two, One... Liftoff? and ?, Celent assesses industry dynamics, the progress of efforts, investment priorities, and solution strategies and makes recommendations for operational risk and compliance management.

"The current state of affairs, where multiple flavours for operational risk initiatives exist, is beginning to change. Firms are increasingly looking to 'rationalize' regulatory initiatives across multiple jurisdictions. Practices adopted to comply with one regulation are 'cross-pollinating' to fit another regulation," states Cubillas Ding, Celent analyst and author of the reports.

These reports examine the state of the market, predict which operational risk vendors are here to stay, and assess nine vendors and their solutions. The vendors included are Algorithmics, Ci3, Financial Objects (previously Raft), FRS, i-flex / Reveleus, Methodware, OpenPages, Paisley Consulting, and SAS.

Operational Risk Management: Three, Two, One ... Liftoff? is 29 pages long and contains 13 figures and two tables. A table of contents is available online.

? is 59 pages long and contains 15 figures and 15 tables. A table of contents is available online.

 

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

London, United Kingdom July 17, 2006

?

Executive Summary 3
Introduction 5
Backdrop To Operational Risk 7
Technology and Functional Imperatives 8
Operational Risk Management Ecosystem 12
Vendor Ranking Methodology 16
Vendor Landscape 18
Vendor Profiles 25
  Algorithmics 25
  Ci3 27
  Financial Objects (Raft) 29
  FRS 31
  i-flex / Reveleus 34
  Methodware 37
  OpenPages 40
  Paisley Consulting 42
  SAS Institute 44
Vendor Rankings 46
Lessons & Recommendations 48
Objectivity and Methodology 56

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