Magazine article American Banker

Banamex Gets Toronto Firm's Risk Management Software

Magazine article American Banker

Banamex Gets Toronto Firm's Risk Management Software

Article excerpt

Banco Nacional de Mexico will install risk management software for its treasury activities under a recent contract with a Canadian technology firm.

Banamex, Mexico's largest bank, will install the software from Toronto-based Algorithmics Inc. to manage risk exposure for its global trading operations, including derivatives, said Richard Dodd, Algorithmics vice president of marketing.

Banamex officials would not comment on the deal and neither party would disclose its value, but Mr. Dodd said it was "a six-figure-plus relationship."

Algorithmics has provided consulting services to the Mexico City-based bank for about a year. The relationship is Algorithmicss first in Mexico.

Charles M. Vincent, a vice president with PNC Investment Management and Research in Philadelphia, said that this type of software product is useful as derivative financial instruments - and the tasks of monitoring and managing the associated exposure - become more complex.

To Be Phased In

In the United States, the increasing use of derivatives by banks has in recent months attracted the attention of regulators keen on assuring that adequate risk management and control systems are in place.

Banamex will phase in the RiskWatch software, which runs on computers with the Unix operating system, over the next 18 months. It also employs object-oriented programming, an easily modified software language, and Unix's graphical user interface, called X-Windows. The first application is scheduled to be on-line by summer.

Algorithmics said the bank is adopting RiskWatch as its "risk management paradigm" and will use it in various departments, including risk exposure in derivative securities, equities, fixed income, foreign exchange, and commodity trading. …

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