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Risk Management

06:52 AM
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Oracle Integrates Risk, Performance Reporting Tools for Financial Firms

Analytic tools for enterprise performance and for assessing risk, from the former PeopleSoft and Hyperion as well as Oracle's own Reveleus, now work together.

Oracle today announced a set of enterprise performance management applications for financial services firms, based on the existing Hyperion, PeopleSoft EPM and Reveleus applications.

The software giant has lofty goals for this product set: to help firms measure and meet performance objectives adjusted for risk, price products to reflect their true risk, and better understand how performance is impacted by threats to liquidity and capital adequacy.

The software suite is based on the merged capabilities of Oracle Financial Services Applications, Oracle's Hyperion, PeopleSoft EPM, and Oracle Reveleus applications. Oracle worked with a 17-member customer advisory board during the design process.

The applications are all built on the same financial services data model and applications architecture as the Oracle Reveleus suite of enterprise risk management applications, so those customers can add additional applications with only marginal incremental investments.

The specific new modules are:

* Oracle Financial Services Profitability Management - helps financial institutions to calculate the profitability of products, channels, segments, and individual customer relationships on a risk-adjusted basis by enabling them to perform complex allocations of operating costs, net interest, capital and other components to the underlying transactions and balances.

* Oracle Financial Services Funds Transfer Pricing - enables banks to determine the account level spread earned on assets and liabilities, and the spread earned as a result of interest rate exposure. The application supports a comprehensive range of transfer pricing methodologies that are based on industry best practices in order to help calculate accurate results at the lowest available level of detail.

* Oracle Financial Services Pricing Management, Transfer Pricing Component - provides real-time transfer rates to support pricing loan transactions that reflect immediate market conditions. Its risk-based pricing methodologies use the transfer pricing methodology and prepayment assumptions found in Oracle Financial Services Funds Transfer Pricing, and include all elements of the profit and loss for an account.

* Oracle Financial Services Asset Liability Management - helps financial services institutions manage and monitor interest rate risk, liquidity risk, foreign currency risk and earnings risk. The application models every loan, deposit, investment, and portfolio individually, to help institutions better understand the risks they have assumed and their sensitivity to economic conditions.

* "Stresses and strains on financial applications, coupled with an imperative to manage and report risk at an enterprise level, have led many institutions to consider implementing an architectural approach to financial data management," according to Kathleen Khirallah, lead analyst for Tower Group's Retail Banking research and advisory service. "Adopting such an approach begins with the acknowledgment that financial data is the lifeblood of the organization and must be leverageable across the bank. An architectural approach can make data from the financial applications more readily accessible to multiple users within finance and risk management."

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