Cognos and IBM launch new financial services solution for banks

The Cognos-IBM Risk Adjusted Profitability Blueprint provides a performance management framework that helps bank executives build precise multi-dimensional, product-level profitability plans and forecasts that are aligned with risk management strategies, enabling greater financial planning accuracy and building a critical connection between the finance and risk organizations.

"Banks today are challenged with striking a delicate balance between aggressively growing their business while controlling and minimizing their risk exposure. Risk adjusted financial reporting provides another dimension to traditional financial metrics, and requires the integration of domain expertise and software capabilities to develop an automated solution. The co-developed blueprint embeds this expertise and delivers the opportunity for a quick-time-to-value implementation that should jumpstart risk adjusted profitability reporting integrated with much needed planning and forecasting capabilities," said Kathleen Wilhide, research director, GRC and Financial Performance Management Solutions, at IDC.

Anchored on Cognos 8 Planning, Cognos 8 BI and coupled with IBM's Banking Data Warehouse, the Cognos-IBM Risk Adjusted Profitability Blueprint capitalizes on the financial services domain expertise provided by IBM Global Business Services to deliver an intuitive planning and reporting environment including:
•Integrated risk-adjusted planning and forecasting at the product level, across multiple dimensions, with risk measures including risk adjusted return on capital (RAROC), economic capital, probability of default, loss given default and expected loss
•Activity-based management and costing for key customer, product and business segments, providing the most accurate, reliable profitability planning and reporting data
•Multi-dimensional scenario planning incorporating activity costs, allowing users to compare the financial impact of several business options and take action on the most profitable course
•Multi-dimensional risk management and profitability reporting and analysis, leveraging the IBM-Cognos Risk Cockpit, a risk management reporting and analysis solution that combines the power of the IBM Banking Data Warehouse with Cognos 8 Business Intelligence
•Optimized support for IBM System p and System x servers running IBM Information Server and DB2 Datawarehouse software
•Full integration with System z mainframes to extend core banking functionality

Available immediately, the Risk Adjusted Profitability Blueprint is the latest in a series of profitability planning solutions launched by Cognos, including Blueprints for branch performance, corporate and retail banking customer segment performance, and insurance product profitability.

The Blueprint also represents yet another collaborative offering between Cognos and IBM. In March 2006, the two companies announced a global strategic alliance to help customers integrate their business processes across the enterprise and gain greater insight into business performance. The alliance agreement included joint development, marketing, and sales of SOA-based solutions to help customers optimize their analytics capabilities leveraging industry-specific best practices.

"Banks require core banking systems that are integrated, open, flexible, scalable and secure," said June Yee Felix, general manager, banking solutions and strategy, IBM. "The integration of IBM's Banking Data Warehouse with Cognos 8 Planning and BI will help customers achieve a comprehensive, integrated view of their core banking business in order to drive increased profits and shareholder value. Together with Cognos, we have delivered a solution that can break down the traditional silos between risk and finance reporting to drive more value from existing information assets."

"IBM and Cognos share a common vision for providing cost-effective solutions that enable banks to identify, report on and analyze the costs of trade, performance, risk management, compliance and profitability, among others," said Derek Morrison, Regional General Manager, Cognos Middle East. "Through this joint offering, banks will finally be able to synchronize profitability plans with relevant risk scenarios, minimizing discrepancies between projected and actual financial results. This new Blueprint offers a significant head-start in helping banks boost profitability with a complete understanding of the credit and operational risks at play."