Oracle Introduces New Risk Management Offering


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Oracle Introduces New Risk Management Offering

Helping Financial Services Organizations Comply With Basel II and Capitalize on New Business Opportunities.

Steven Miranda
VP of Application Development
Oracle

Oracle Corp. recently previewed its Oracle(R) Regulatory Capital Manager, a new offering designed to help financial services providers comply with the Bank for International Settlements (BIS) Third Consultative Paper (Basel II or the Accord) requirements, scheduled to take effect January 1, 2007. The offering can also help financial institutions to leverage Basel II to increase profitability.

Comprehensive Approach to Risk Management

Basel II updates 1988 European capital rules for risk management practices that align capital with operational, credit and market risks for banks operating internationally. Specifically, it seeks to strengthen existing capital adequacy standards by introducing more sensitive guidelines for credit and market risks, and new capital requirements for operational risk.

Oracle Regulatory Capital Manager, a pillar of Oracle's comprehensive set of risk management tools, allows financial services organizations to capture and analyze the data required under Basel II, and subsequently calculate regulatory capital using any of the methods prescribed by the Accord. Financial services institutions can also analyze, edit and review calculations and data to help them in pursuing their optimal regulatory capital strategy. In addition to ad-hoc reporting capabilities, the offering provides out-of-the-box reports that let institutions quickly and easily view key regulatory capital data and help them meet mandatory external reporting requirements.

"Our vision for Oracle Regulatory Capital Manager extended beyond delivering a basic tool to help financial services organizations achieve baseline Basel II compliance," said Steven Miranda, vice president, Application Development at Oracle. "Instead, we designed a broad, highly flexible product that enables financial institutions to incorporate risk management into their daily business processes as a driver for improved business intelligence and performance. For example, out-of-the-box integration with other Oracle E-Business Suite applications, such as Oracle Performance Analyzer and Oracle Funds Transfer Pricing, allows financial institutions to use regulatory capital results to determine account, customer, business unit and product profitability measures on a risk-adjusted capital basis. The integration with Oracle Internal Controls Manager, another Oracle E-Business Suite application, allows financial services companies to leverage their regulatory investment to decrease regulatory capital and compliance costs even further."

Oracle also announced that Oracle Consulting Services, as well as Deloitte MCS Limited in the United Kingdom ("Deloitte Consulting-UK") and Deloitte Consulting LLP in the United States ("Deloitte Consulting-US"), are Oracle's preferred implementers of the Oracle Regulatory Capital Manager.

"Deloitte Consulting-UK and Deloitte Consulting-US are uniquely positioned to help Oracle bring its Basel II offering to the U.K. and U.S. markets," said John Keane, Principal of Deloitte Consulting-US. "The combination of the recognized experience of Deloitte Consulting-UK and Deloitte Consulting-US in risk management, regulatory compliance and technology solutions, and Oracle's leadership in data management and applications for risk and business management raises the bar for competitors in this market."

In implementing the offering in their markets, both Deloitte Consulting-UK and Deloitte Consulting-US provide a deep functional understanding of Basel II along with experience in gap analysis between product feature/functions and prospective customers' existing environments. They also bring project/program management, systems implementation and application configuration testing capabilities to their relationships with Oracle.

Components

Oracle Regulatory Capital Manager is built on Oracle's comprehensive Enterprise Management Foundation, which incorporates enterprise wide data into a single data store. This approach facilitates making enterprise information internally consistent and readily accessible. The platform also enables independent software vendor (ISV) applications running on Oracle technology to receive and update information to maintain its accuracy.

Oracle significantly enhanced its Enterprise Management Foundation to help companies address Basel II requirements. Enterprise Management Foundation collateral tables, for example, now hold all necessary information for incorporating adjustments to Risk Weighted Assets (RWA) under the Basel II framework. In addition, Oracle has seeded the platform with required Basel II data categorizations, such as operational risk business lines, product and transaction types, rating types, customer types and asset classes.

Oracle Regulatory Capital Manager complements Oracle's other risk management products -- including Oracle Internal Controls Manager, which enables executives, controllers, internal audit departments and external auditors to document and test internal controls and monitor ongoing compliance. It also enables financial organizations to simultaneously track and monitor risks from multiple compliance environments, such as Sarbanes-Oxley and ISO 9000, in addition to Basel II.

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