IBM Snaps Up Risk Analytics Firm AlgorithmicsBy Nathan Eddy | Posted 2011-09-02 Email Print
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The acquisition expands IBM's business analytics capabilities in the financial services industry.
Technology giant IBM announced a definitive agreement to acquire Algorithmics for $387 million, subject to price adjustments at closing. Algorithmics is a risk analytics firm with operations in Toronto. The company’s risk analytics software, content and advisory services are used by banking, investment and insurance businesses to help assess risk, address regulatory requirements and make more insightful business decisions.
Algorithmics is a member of Fitch Group, which is majority owned by Fimalac, a holding company based in Paris.
The acquisition expands IBM's business analytics capabilities in the financial services industry by helping clients quantify, manage and optimize their risk exposure across a range of financial risk domains, including market, liquidity, credit, operational and insurance, as well as economic and regulatory capital. More than 350 clients, including 25 of the top 30 banks and more than two-thirds of the CRO Forum of leading insurers, use Algorithmics analytics software and advisory services. Clients include The Allianz Group, BlueCrest, HSBC, Nedbank, Nomura, Societe Generale and Scotia Capital.
"Today's economic environment demands that financial institutions have more cash on hand, a better understanding of their financial standing and the ability to deliver more transparency to stakeholders," said Rob Ashe, IBM general manager of business analytics. "Combining Algorithmics' expertise with IBM’s deep analytics portfolio will allow clients to take a more holistic approach to managing risk and responding to economic change across their enterprises."
According to a recent IBM Institute of Business Value survey of 1,900 global CFOs, nearly half indicated that their finance organizations are not effective in the areas of strategy, information integration, risk and opportunity management. The survey results suggested that the importance of integrating information has more than doubled, mirroring the exponential rise in information volume and velocity within businesses today.
"It is increasingly important to deliver integrated solutions that provide a deep understanding of risk and enable effective decision support at the same time as meeting rapidly evolving regulatory requirements. The need to have the right information at the right time is fundamental to developing and managing business strategies," said Dr. Michael Zerbs, president and COO of Algorithmics. "Combining Algorithmics' thought leadership, technology, content and services with IBM's globally recognized analytics business will help a broader group of clients improve their business performance based on a deeper understanding of risk."