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.

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