Project paves the way for Financial Objects to develop dedicated credit risk solution for banks

Financial Objects plc, an international supplier of software solutions to the financial services sect or, today announced that it has been selected by Rabobank for the joint development of a new global counterparty credit risk management system. The three-phase project is well under way and once live, the system will span Rabobank’s global capital markets division with over 1,000 users across the bank’s international network. The solution will allow users to capture, monitor and report credit exposure, and manage collateral operations against global limits.

Rabobank, which has operations in 38 countries around the world and assets of more than €400 billion, is one of the top 30 banks in the world. Ten years ago the bank implemented its own credit risk management solution, SKY, which it has continually developed to enhance the system’s functionality and support its evolving business requirements. However, being based on legacy technology, Rabobank decided to upgrade the entire platform and embarked on a comprehensive investigation of the credit risk management solutions market.

Having been impressed with Financial Objects’ re-engineering of its energycredit solution, which provides credit risk management for energy trading organisations, Rabobank chose Financial Objects as its development partner. This move will see Rabobank’s SKY system migrated to a Microsoft .NET platform and delivered to the user community through a web portal using the latest Microsoft technologies and advanced user interface capabilities.

“Given that we wanted to retain the same level of business functionality available in SKY, a joint development project soon became the obvious choice,” said Simon Calvert, Head of Risk IT at Rabobank. “We expect to make significant savings compared to the cost of implementing an alternative system from scratch, while retaining what we consider to be superior functionality. By employing Financial Objects’ proven migration methodology and experience we can have a future-proofed system, utilising the latest Microsoft technologies, to significantly reduce our total cost of ownership, in particular the cost of deploying the system to new users and ongoing support costs.”

The newly developed SKY system will provide the core platform on which to build a sophisticated analytics engine to create a comprehensive methodology for calculating Potential Future Exposure (PFE) with an integrated pre-deal checking facility.

Michel van Leeuwen, managing director – Worldwide Capital Markets, Microsoft commented: “This development firmly places both Rabobank and Financial Objects at the forefront of technology applied to credit risk management, and demonstrates the many benefits of utilizing Microsoft’s latest web development platform. We expect this project to set the precedent for credit risk management platforms in the banking industry.”

The first phase of the project will see Financial Objects and Rabobank develop the core platform and is scheduled to complete in the summer of next year. The following phases involve further integration and implementation of the PFE analytics module, as well as the development of the reporting functionality and user interface.

Roland Jones, managing director of the Risk Management division at Financial Objects said: “In today’s volatile credit climate, it’s imperative that banks have a robust and sophisticated credit risk management platform. We believe that Rabobank will be ahead of most in this area as the new version of SKY emerges. This is an important and very timely project for Financial Objects which will take the foundations of our award winning energycredit solution to deliver a comparable system to credit risk managers in the financial services sector.”