Halifax Group first with new operational risk solution

Halifax Group first with new operational risk solution

Toronto-based Algorithmics has launched Algo OpRisk, an operational risk management solution developed with Halifax Group and Arthur Andersen.

Algo OpRisk is a component-based risk management solution, currently consisting of Algo OpData and Algo WatchDog. Algo OpData, the newest component, is an infrastructure for operational risk data, in the form of losses, near-misses, issues and key risk indicators. It currently provides an auditable system for the collection and management of operational risk data and an enterprise-wide framework for internal risk control. In future, Algo OpRisk will be extended to include risk capital and self assessment modules.

The solution's open architecture and robust APIs (Application Programmer Interfaces) are said by Algorithmics to enable easy customisation for clients wanting to use part, but not all, of the solution.

The Halifax Group is the first to implement the Algo OpRisk solution and was instrumental in providing the building blocks of Algo OpRisk. With over 20 million customers, Halifax is one of the UK's leading providers of personal financial services. Halifax is currently in the process of merging with Bank of Scotland to create a 'fifth force' in the UK domestic marketplace.

Michael Zerbs, Algorithmics' vice president of research and product marketing, comments that today's turbulent financial markets, increasingly complex financial systems, and the enhanced regulations specified by the Basle Accord have led executives and risk managers to realise the importance of proactively measuring and managing operational risk.

"The Accord has mandated the regulation of operational risk by the January 2004 deadline. We believe that in order to meet the capital requirements of the Accord, there is a need not only for risk analytics, but also for a rigorous system to enable data collection," says Zerbs.

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