RealTime IT News

IBM Package Looks to Stop Risky Business

As vendors look for ways to differentiate themselves with compliance packages for enterprises, some IT specialists are crafting regulation-specific offerings.

IBM is one. The Armonk, N.Y. company said Monday it has put together a software, hardware and consulting services package to help banks meet the obligations of the forthcoming Basel II Capital Accord.

Basel II is an update to the original effort in Europe to improve the consistency of capital regulations by assessing credit risks. Scheduled to go into effect in 2007, the guidelines were created in the wake of billions of dollars that were lost to fraud and poor risk management practices. Basel II spans over 100 requirements for banks.

Though a few years away, Basel II promises a wealth of potential for IT companies such as IBM or HP, which have the products and services combinations to ensure safe investments in compliance solutions. U.K. Research group Datamonitor estimates the arrival of Basel II will prompt European banks to spend some $4 billion on software and services over the next two years to help them comply.

That is a big reason behind IBM's Risk and Compliance group -- Basel II to help financial organizations automate the way they present customer and operational data to minimize risk, according to Jeff Jones, director of strategy, DB2 Information Management software, IBM.

The package, which is available now at a base price of $350,000, consists of a number of top IBM products, including DB2 Universal Database, DB2 Information Integrator, pSeries servers and Total Enterprise Storage Server, also known as Shark.

Jones said IBM's Banking Data Warehouse and DB2 Universal Database form the crux of the solution to help banks connect scattered data repositories. The Banking Data Warehouse provides a data model which can be used to build a Basel II database based on DB2's built-in analytics for storing and analyzing information.

DB2 Information Integrator, which mines data from different repositories in real time will provide a single view of information for banks, while pSeries and Shark are offered to meet power and storage requirements, the latter of which is crucial in adhering to today's government standards, which also include Sarbanes-Oxley and HIPAA.

Taken together, the products allow banks to sort through myriad business records from weeks to hours and reports are sent to flag discrepancies between a bank's ledger and transactions.

Jones noted that although Basel II is a few years away, it is recommended that banks have about three years of information on hand by the end of 2006 to prepare. Risk and Compliance -- Basel II will also lay the foundation for meeting requirements for Sarbanes-Oxley, among other regulations.

IBM's Business Consulting Services (BCS) Financial Services Sector (FSS) staffers will work with clients to implement the package.

Several software vendors have jumped aboard the compliance solution train in the last few months, but experts agree IBM, HP, EMC and other larger vendors are well positioned to lead the space because of the breadth and depth of their offerings.