By John Ginovsky

While a lot of the Big Data hype focuses on being able to drill down to the needs and wants of individual customers, the capabilities associated with processing and understanding huge amounts of information can be applied to other, more back-office types of uses.

Oracle Financial Services recently announced the availability of new products that introduce highly advanced analytical applications that financial institutions can use to address model risk management, credit risk management, Basel regulatory capital requirements, and compliance with the Foreign Account Tax Compliance Act.

Tech Topics talked with S. Ramakrishnan, group vice president and general manager at Oracle Financial Services about the products and, more important, about the overall value that analytics can help to meet today's growing risk management and compliance requirements.

Ramakrishnan points out five "value propositions" in this area for the financial services industry:

"The first is finances. The second is to the risk community. The third is to the compliance community, such as money laundering and training...The fourth one is customer analytics, such as segmentation, behavior, channel performance and understanding.

"Underpinning all these are analytical technology and data foundational technology, such as data modeling."

He adds: "Another development is how the regulators are looking at banks now. It is profoundly different from years past. Regulators are no longer just interested in asking, `Do you have a good risk management process and culture?' They are interested in understanding the effect of that risk management process on the business performance of the bank. They are looking at risk and finance together. This is a huge change."

One new Oracle solution expands its Financial Services Enterprise Risk Management suite to include a new model risk management solution as well as enhanced offerings for regulatory capital management and credit risk management.

The model risk management segment is designed to meet evolving regulatory mandates that require a comprehensive view of risks associated with inaccurate or improperly applied financial and business models. The credit risk management portion helps to centralize indications of emerging risk across product types, lines of business, geographies, and legal entities. The Basel regulatory capital version provides a consolidated view of leverage ratio, capital adequacy, and capital buffers, with the ability to provide a granular analysis under baseline and stressed scenarios.

A separate new offering addresses provisions of FATCA due to take effect in 2014, which will require financial institutions to classify account holders as either United States-based or non-United States-based, and report specific information to the Internal Revenue Service. To do this requires something analogous to the know-your-customer capabilities required under Bank Security Act and other mandates, and represents another application where the ability to process quickly tons of data is needed.

All of these applications are intensely data-heavy and require advanced analytical abilities, says Ramakrishnan. It's to fill this need that Oracle has started offering technological solutions to the financial services industry.

"What we've done over the past several years in the analytical applications family is provide profitability and financial analytical applications, notably in transfer pricing, cost allocation, budgeting and planning, and such products," he says. "On the risk side we have capabilities around credit risk, operational risk, market risk, capital adequacy, liquidity risk, and loan loss forecasting and provisioning."

Read more about Oracle's new solutions at:

http://www.oracle.com/us/corporate/press/1910720

http://www.oracle.com/us/corporate/press/1910722

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About the Author John Ginovsky is contributing editor of ABA Banking Journal and editor of the publication's TechTopics e-newsletter. For more than two decades he has written about the commercial banking industry. In particular, he's specialized in the technological side of banking and how it relates to the actual business of banking. He previously was senior editor for Community Banker magazine (which merged with ABA Banking Journal) and was a staff writer for ABA's Bankers News. You can email him at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

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