Software Alliance Corp. announced this week that it has released a significantly upgraded version of its risk management software for banks.
The software, called Radar, is a decision support tool that a number of large banks, including Chemical Bank, Credit Suisse, and Great Western Bank, have installed in the asset/liability management areas to better forecast the impact of interest rate swings.
Software Alliance officials said the new version of Radar has been modified to handle a variety of performance measurement activities at banks, including transfer pricing (where interest rate risk can be allocated to specific business lines); business unit and product profitability modeling, strategic planning, derivatives credit exposure analysis, product design, and merger analysis.
"We have been known in the past for an excellent asset/liability software package, [while] all along it had been designed to be much broader," said Alan Tobey, a product manager at Software Alliance. "Now we are delivering those capabilities in the new version."
Berkeley, Calif.-based Software Alliance is not alone in expanding the horizons of asset/liability software.
Competitors Sendero Corp., Scottsdale, Ariz., and Santa Monica, Calif.-based Treasury Services Inc. have also moved into the profitability measurement arena, a discipline that has become a hot topic in banking circles.
But Mr. Tobey said that Radar is unique in that the same data base is used for many different kinds-of risk analysis.
"One of the things Treasury Services does. well is the data integration work, but they have separate [analysis] modules that need to pass data back and forth," to perform certain tasks, he said.
Radar relies on single data base, he added, making processing large amounts of information more efficient.
Most of Software Alliance's 14 existing Radar customers have installed the new version, though Mr. Tobey noted they are just beginning to utilize its broader functionality.
"The transfer pricing, for-example, will take about a [fiscal] quarter to be integrated into the way the banks work."
Mr. Tobey said an additional enhancement to Radar, due to be available by the end of this year, will allow banks with global operations to perform risk measurement in multiple currencies.
Future releases will add specific planning and budgeting capabilities, asset securitization, and mortgage-backed securities analysis.
Now that Radar has been repositioned as more than just an asset/liability management tool, Mr. Tobey said, "one way that Radar has been sold was to' meet a specific departmental need like ALM, and then having been installed, begins to broaden out. in other areas." He added that the new version is aimed at chief financial officers who desire a comprehensive risk measurement system.
Radar can run on high-performance computer workstations from Hewlett-Packard Corp., Digital Equipment Corp., and International Business Machines Corp., each employing their respective versions of the Unix operating system.