IBM Turns Risk Management Into Smarter Risk

Risk is everywhere, ditto the opportunity
Risk is everywhere, ditto the opportunity

After a series of acquisitions in the risk management market, IBM is trying to make it simpler for customers to leverage an extensive portfolio of products under the Smarter Risk umbrella including new offerings that help firms manage risk more holistically like the IBM Algo Integrated Risk platform.

What’s smart about such offerings has to do with the context through which customers perceive risks, define their risk tolerance level and start leveraging the available tools to address the issue at hand.

The crux of the issue is that risk is everywhere and the problem appears to be getting worse as more devices are connected to drive online transactions to new heights, which in turn have attracted hordes of cyber criminals. In recent months, failing to thwart such attacks has cost retailers such as Target dearly. Another part of the equation stems from the opportunity that presents itself when staggering amounts of data from social media to Internet of Things become available.

With Smarter Risk, IBM’s position is that its solutions covering risk and analytics could help address the issue from both sides of the coin.

It’s a familiar approach. After all, IBM has been pitching the modern demands and merits of improving workforce, commerce, or the planet for that matter. Smarter Risk encompasses products from its acquisitions of OpenPages for governance, risk and compliance; Algorithmics for financial risk management; and more recently Trusteer for counter fraud management, which is the impetus behind the Smarter Risk push.

In the case of counter fraud management, IBM extends that further by delivering cybercrime protection security intelligence, one of the pillars of its security offerings, as well as the controls, policies and processes needed to make such measures effective. Packaging has also been improved with the release of Counter fraud as a service, allowing customers to access the products and services via the Cloud.

For Algo’s Integrated Risk Reporting Manager, IBM is touting the fact some customers are already running it in a hybrid Cloud that combines the conventional on-premise software of Algo and on-demand risk reports that can be generated on the fly. In other words when customers are comfortable running their entire financial risk management system in the Cloud, IBM is capable of accommodating such migration.

As with other Smarter Workforce, Commerce and Planet initiatives, IBM’s strength lies in its platform. Having invested billions of dollars in acquiring, developing and enhancing different analytics products, IBM’s Smarter Risk is poised to make a big splash with a robust platform that includes everything from Cognos for analytics to Netezza for Big Data management as well as the collective wisdom of some 1,500 dedicated risk professionals.

Other upcoming enhancements include adding business planning capabilities into Algo’s Integrated Risk Service to allow Risk aware business planning, while expanding the types of risk reports to include more granularity and lines of business. For the Algo Integrated Risk Reporting Platform, new features will include enterprise model risk governance as well as more off-the-shelf risk packages for policy and compliance management.

IBM Smarter Risk is far from becoming a panacea given the wide array of risks facing banks, retailers or any entity that routinely does business with millions of customers through various channels. There are point solutions such as Imagine Software that are readily accessible via the Cloud and probably can handle some of the risk and analytics tasks that IBM is taking on and perhaps for a fraction of its costs.

Still such options require active involvement on the part of the users – similar to the value of DIY stores for those already well-versed in running such systems.

On the other hand, IBM aims to remove the hassle of dealing with risks for its constituents at a time when many just want to use a single risk platform to tackle a complex problem. A few may even want to hand the job over to someone like IBM. And that may well be the smartest decision anyone can make.