Credit and fraud aren't buzzwords, but they can be buzz saws. Unless banks can demonstrate publicly verifiable risk management, successful fraud prevention and credible governance, all of the tech firms on this year's list will have a smaller marketplace of financial clients to sell to in the future.
"GRC (governance, risk and compliance) is the basics and fundamentals. You want to prove all numbers that you have in your financial report are accurate, and demonstrate that you're doing the right thing from a sustainability standpoint; that you're not just looking at quarterly earnings," says Jonathan Hornby, director of worldwide and performance for SAS.
SAS this year will leverage its considerable analytic capabilities and four-figure client base to plot a sweeping grab for market share in this highly competitive segment by releasing a series of new GRC-oriented software.
New performance measurement software, scheduled for a fourth quarter rollout, will allow faster delivery of data analysis to allow more accurate financial and human resources decision-making. In the third quarter, SAS will introduce a new risk management product that will enable institutions to measure exposure and risk across all risk types and lines of business, including the distribution of incentives for consistent use of risk-adjusted returns across the enterprise. Banks will also be able to deploy risk applications in areas such as such as asset and liability management, market and credit risk. "Risk-adjusted performance is auditable, you can comply with regulations and prove to the public that you're doing the right thing and it's ethically sound," Hornby says
SAS should get a head start in capturing the business of its 3,100 financial services clients by building its new GRC software on the existing SAS business analytics framework, a combination of data integration, analytics and reporting that allows institutions to incrementally expand their use of SAS' technology.
SAS will use its wide ranging deployments at these institutions, and a historical loss event database of nearly $2 trillion as a differentiator. But it will also have plenty of competitors as many tech firms offer of risk management/GRC solutions, including Archer Technologies, whose client base includes MassMutual, ABN Amro and Royal Bank of Canada; BWise, which counts ING and Rabobank among its customers; and Open Pages, which has won the business of Barclays, BMO Financial Group, among others. Other competition will come from analytics and enterprise risk firms such as Algorithmics; and business process management firms such as Metastorm and Lombardi. "SAS has the depth of its existing product line as an advantage, including its risk management solutions," says Rodney Nelsestuen, senior research director at TowerGroup, who adds that with these new rollouts, SAS is adding usability.
"Nothing else that I've seen has this level of ease of use and integration capabilities," says David Gumpert-Hersh, vp of credit risk for Wescom Credit Union in Pasadena, Ca, which is currently using SAS' risk technology for tasks such as simplifying reporting to the board of directors and expanding credit risk management to search beyond FICO scores to consider past delinquency rates. The ability of SAS to easily centralize previously disparate risk management and compliance platforms is also part of the appeal. Tech firms, particularly large end-to-end firms like SAS, often pitch to banks on the peril of siloed corporate culture, and SAS' pending GRC rollouts are no different. But instead of missing out on cross sell opportunities, this time the pitch is a warning about how scattered glitches in reporting, security and compliance can larger than they appear. "You have to look holistically at the enterprise," Hornby says. "Some risks can be small, but they can add up over time."
