Eugene B. Shanks Jr., former president and director of Bankers Trust New York Corp., has founded a technology company specializing in risk management.
NetRisk Inc. of Greenwich, Conn., offers consulting, software, and systems integration related to enterprise risk management.
Enterprise risk management aims to minimize a company's exposure to potential losses by projecting the financial effects of various market swings or business moves.
As commercial banks increase their trading activities, and as the credit market becomes more volatile, risk management has grown in popularity.
"The basic premise of NetRisk is that the market for enterprise risk management is growing rapidly and moving from talk to action," said Mr. Shanks, NetRisk's chairman and chief executive officer.
NetRisk "is placing a big bet on this being a growing market," he said.
Though NetRisk is only a few months old, it already has hired a core management team:
James B. Lockhart 3d, formerly CEO of Pension Benefit Guaranty Corp., is NetRisk's chief financial officer.
Daniel T. Mudge, who worked at Bankers Trust for more than 24 years, heads the company's risk management group.
Bonnie Loopesko, a 12-year veteran of the Federal Reserve, is NetRisk's risk methodology partner.
Mr. Shanks, 50, has a wealth of experience in banking. Starting at Bankers Trust in 1973, he rose through the ranks to hold top posts in a variety of areas, including global markets, technology, and strategic planning. He also spent two years as treasurer at Commerce Union Bank.
In the wake of a controversy surrounding derivatives sales, Mr. Shanks resigned from Bankers Trust in late 1995 along with several other top executives.
He spent the time after his resignation looking into business opportunities and was attracted to risk management because of the rising demand for such services.
NetRisk plans to target banks, insurance companies, and energy companies.
It already has signed three contracts, company executives said.
Though the risk management technology market is crowded, companies with strong systems integration expertise can fare quite well, said Debbie Williams, research analyst at Meridien Research Inc., Needham, Mass.
Risk management software systems do not communicate easily with one another, making the assembly of enterprisewide systems very difficult, she said.
In addition, the changing nature of the banking business complicates risk management. "People do not know what a risk system is, or what it should be yet," Ms. Williams said.