The browser-based system, which runs on DrKW’s corporate intranet, is a rules-based workflow oriented solution which maps the bank's corporate structure, geographic spread, business processes, product structure and control environment into a fully automated loss measurement and management solution.

The software consists of a number of server-based components, written in Java, with Microsoft's SQL Server 2000 as the database repository. The application server is available either under Unix, as at DrKW, or Windows NT/2000.

Jonathan Howitt, director of operational risk at Dresdner Kleinwort Wasserstein in London comments: "We went live with Radar, our name for the application, in London in December 2000, and subsequently this year in Frankfurt, New York, Hong Kong and Tokyo. As well as sales, trading, and settlement errors, the system has also been rolled out to various support activities for more generic incident capture purposes."

The global implementation means that all loss data is centrally available within the bank’s risk control group as soon as it is recorded, he says, as well as facilitating a consistent global measurement and management approach. The entire application is parameterised and meets all of the current suggestions for loss event typing and categorisation proposed for the New Basel Capital Accord.

The next phase of the project, scheduled for completion in Q1 2002, will add key risk indicator functionality to Radar states Howitt.

“Now that we have the platform and engine for managing loss incidents, we are building the early warning side of the solution," he says. "By combining loss data and risk indicators on the same platform, we can see the inter relationship between the two – for instance, for a given activity we can profile how changes in staffing levels, system performance, and business volumes affect the frequency and cost of loss incidents."

Raft Radar will be available for organisations to license for their own use, either as a plain-vanilla solution or with additional modifications according to specific requirement.

On this basis, the product can either be managed in-house by the organisation or outsourced, something Dresdner Kleinwort Wasserstein has considered. “Currently, it makes sense to run Radar in-house,” says Howitt. “However, once we have completed the key risk indicator functionality, we will look to outsource the systems management. We are talking to Raft International about this, as an ASP solution is attractive for us”.

Raft is currently working with Hewlett-Packard on constructing an ASP model which will offer Radar on a pay-per-use basis to the global financial services community.

“This will allow participants in the ASP forum access to a comparative, obviously desensitised, external loss database”, states Raft sales and marketing director Mike Finlay. “The financial services market normally only matures once market standards are in place. As of yet, there are no market standards for operational risk and Raft International intend Raft Radar to become the standard in this area”.