Sponsor's article > SunGard to rise again

SunGard, the 900-pound gorilla of the financial sector software market, has been strangely absent from the operational risk software arena so far, according to both financial and technology industry executives. Now, however, that looks set to possibly change as the firm's executives roll out a new op risk solution, and ponder what their next move should be.

SunGard has begun actively marketing a loss data tracking tool, with workflow capabilities, that was originally developed by Credit Suisse Asset Management’s Swiss office, according to Dean Jovic, group managing director for risk management and Basel II systems at SunGard Trading and Risk Systems, based in Zurich. Although the product has been on sale inside Switzerland for about a year, Jovic says that SunGard is now offering the tool to small and medium-sized clients in other jurisdictions.

The tool, called Focus OpRisk, has between 70 and 80 data fields, but the emphasis of the product is on op risk management, not measurement. "We don’t want to quantify the losses – we can do it, but that’s not the primary focus," says Peter Standler, head of risk management systems at Credit Suisse Asset Management in Switzerland. "The primary focus is to add value to the business. If you compare this with other loss databases, you can normally do some analysis but you don’t get really deep information about what you can improve in your processes."

Jovic also says SunGard has reformulated its Basel II Capital Manager product – this is an analytics layer designed to calculate and report credit risk advanced internal ratings- based (A-IRB) approach requirements to do modelling and reporting for the op risk advanced measurement approach (AMA). Jovic admits, however, that the firm’s offerings lack a self-assessment or key risk indicator tool.

SunGard still has its partnership with Raft, the UK-based software firm with a product called Radar. But that partnership has failed to produce any sales for SunGard, according to Jovic, who points out that the partnership is non-exclusive on both sides. still have the possibility to also pitch other op risk systems if we feel that a different op risk system would be a better fit," he says, adding that SunGard is seeking to develop other op risk alliances. "Operational risk is something that evolves," he says. "Rather than committing today to what we think is the best op risk system, we basically want to keep it open until we have clear evidence that the market is mature enough." He says the software firm has had discussions – or is currently in discussions – with most of the other op risk names.

But will future deals be transactions or simply more alliances? "SunGard is known for having an acquisition strategy and growing by acquisition," says Jovic. "That would certainly be a viable solution at some point, but I think right now it is simply too early."

Operational Risk