Magazine article American Banker

Oracle, SAP See Strong Risk Management Market

Magazine article American Banker

Oracle, SAP See Strong Risk Management Market

Article excerpt

Byline: Steve Bills

Two major software companies are introducing applications that they say could help banks improve their risk management and possibly recover from the current economic mess that resulted from depleted capital, toxic assets, and poor lending policies.

The database vendor Oracle Corp. today is expected to announce a pair of risk management applications aimed at helping financial companies monitor their capital adequacy.

Oracle's German rival SAP AG came out with a software suite last week, and one executive said the risk management and regulatory compliance modules will likely provide SAP its biggest sales opportunities in the financial industry for at least the next year.

Though many banks are being extremely careful about investing in technology, one analyst said such applications could be necessary for financial companies facing sharp questions from their boards, regulators, and investors.

Both Oracle and SAP, of Walldorf, Germany, plan to offer their products globally. Oracle, which has grown by acquisition, may have a stronger competitive position in the United States market than SAP, which has developed much of its technology internally.

S. Ramakrishnan, the chief executive of Oracle's Reveleus and Mantas financial software units, said he expects banks to be interested in his company's new products, even in today's capital-constricted environment.

Risk management "is necessary for their survival," Mr. Ramakrishnan said in an interview last week. "This is about survival strategy. This is about control in a very difficult environment."

The new applications are designed to meet the Internal Capital Adequacy Assessment Process requirements under Pillar 2 of the Basel II accord.

The applications, known as Oracle Reveleus ICAAP Analytics and Oracle Reveleus ICAAP Assessments, feature extensive dashboards and reporting tools bankers can use to identify trouble areas, Mr. …

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