Mexico's Afores rolls out Algorithmics operational risk software

Source: Algorithmics

Algorithmics today announced that six of the AFORES in Mexico have now successfully implemented Algorithmics' operational risk management solution to help to identify, manage, control and report on the operational risks they face in their day to day operations.

Algorithmics is delivering the operational risk management solution to the AFORES via an ASP service provided by Valmer, Algorithmics' joint venture with the Bolsa Mexicana de Valores, which is currently expanding its risk management services.

AFORES ("Administradoras de Fondos para el Retiro") is the mandatory, funded, defined contribution pension plan program that was established in Mexico in 1997. Under this system, private sector employees contribute to funded pension accounts which are invested by private money managers.

The programme is regulated by the Mexican private pension funds regulatory body known as CONSAR, which sets operational risk management rules and specific time frames for the AFORES fund managers.

The AFORES funds are the largest savings pool in Mexico, with approximately US$71 billion under management. There are 21 AFORES fund managers and since January 2005 they have been allowed to invest a portion of their assets in equities and foreign assets as well as high-quality Mexican public and private financial assets.

Dan Mudge of Algorithmics said, "The particular solution being used by the AFORES companies was specifically implemented to comply with CONSAR regulations and then each client's internal operational processes, business areas, products and geography. Our clients are using Algo OpVar software via the web to collect loss events, assess their risk and control environment, manage their key indicators and configure operational risk reports. Valmer is hosting this web solution by using the Mexican Stock Exchange's infrastructure which provides the servers, firewalls, security, disaster recovery plans etc. We are very pleased that so many of the AFORES are finding that the solution helps them to optimize their capital allocation and we look forward to working with more of them in the future."

Arturo Hanono Casta├▒eda of InverCap said, "Algo OpVar has increased our efficiency, reduced the amount of manual processing required and helped to disseminate critical information throughout the enterprise. It has also provided us with a comprehensive audit trail to analyze results, benchmark activities and make better business decisions."

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