Citi, Kleinworts And Rothschilds Take Riskwatch For Risk Analysis

TECHNOLOGY & INTEGRATION

CITIBANK and Rothschilds in London have installed Algorithmics' Riskwatch risk management analytics engine, according to sources. These sources add that Dresdner Kleinwort Benson's London office is currently in the process of installing Riskwatch.

Peter Fegelman, the Citibank derivatives chief responsible for bringing in Riskwatch, and Andrew Giles, Rothschilds' director of global risk management, both decline to comment on their relationship with Algorithmics.

Officials at Kleinworts could not be reached for comment by press time. Ben Salama, head of Algorithmics' recently established London office, also declines to comment on the three installations.

Sources say the three banks have also hired Incity, a London-based systems integration house, to collate data from disparate systems and port it into Riskwatch. This includes front office trade data, live market data and static information such as securities databases.

An Incity spokesperson confirms that Rothschilds, Citibank and Kleinworts are among the company's clients, but declines to comment on the nature of the work undertaken at these three banks.

Incity has also released a packaged application dubbed Riskplatform that is "designed to gather data from all sources within an institution, cleanse it and format it to the requirements of the Riskwatch system".

FEA alliance

Algorithmics, meanwhile, has announced plans to integrate FEA's derivatives pricing models with the Riskwatch risk management engine.

Salama says Algorithmics supplies its own exotic option pricing modules, but the vendor prefers to concentrate its resources on risk management analytics. "This is a smart area to work with a specialist, rather than doing it ourselves," he adds.

Algorithmics is actively looking for other strategic alliances to enhance Riskwatch, says Harvey Gordon, the vendor's vice president of business development.

He says the Riskwatch analytics engine has been developed in a way that "allows us to connect with models from third-parties or clients very easily."

"Clients make choices of models based on their own requirements and we can't hope to deliver a full set of models to make everyone happy," says Gordon.

He adds that Algorithmics picks up a small royalty for each copy of FEA's models that it places. The bank then pays FEA separately for its model.

The FEA and Algorithmics alliance falls into a trend of smaller financial analytics vendors forming alliances with larger vendors to help strengthen their products and marketing.

Cambridge-based Brady recently signed a similar deal with GE Information Services to incorporate its Trinity market risk and VAR analysis modules with GEIS's RXM global credit risk management application (RMO, November 11, 1996).