Guest post from Dr. Michael Zerbs, Vice President, IBM Risk Analytics
This month we at Algorithmics, an IBM Company, released the June issue of TH!NK, our semi-annual magazine exploring the world of financial risk management with an editorial focus on the space between inspiration and implementation.
TH!NK is an award-winning publication written by and for risk professionals, featuring engaging, original content on thought leadership designed to inspire conversations about the challenges of today and the possibilities of tomorrow.
As is most editorial writing on the subject of financial services in recent years, the issue is markedly inspired by the ramifications of turbulence and change, and the possibilities that arise in their wake.
Recent elections in France and Greece have added a new chapter to the ongoing sovereign debt crisis in Europe. Yet following both elections, Chancellor Angela Merkel of Germany clearly stated that neither she nor her government were interested in reopening the eurozone fiscal pact, or the strategy of deficit-cutting austerity measures.
Determining the best response in times of uncertainty has been an issue for financial service firms since the outset of the financial crisis. Regulators, governments and analysts have called for financial firms to change the way they do business.
One way that firms may be able to respond is by looking to how they have managed uncertainty in the past. In “Back to the Future,” the June issue’s cover story revisits capital and its role in the bank of tomorrow. When early banks operated as partnerships with personal liability attached, every decision regarding capitalization and risk profiles was owned by decision makers. The impact of this framework on their business holds interesting implications.
Elsewhere in the issue are other features that explore new approaches to existing challenges. These include a look at interconnectivity and stochastic modeling, risk and social media and the CVA desk’s function of pricing the true cost of risk. In “Through the Looking Glass” we return to the topic of curve fitting, with an empirical look at how chief risk officers and supervisors can gain critical insights into major exposures they would otherwise be unable to obtain.
“Back to the Future” is not only the insightful cover theme of this month’s TH!NK magazine, inspired by turbulence in financial services. It is also emblematic of the possibilities beginning to come to fruition in the wake of change for Algorithmics, as we continue to undertake our transformation as an IBM Company.
Together with IBM OpenPages, Algorithmics has formed IBM Risk Analytics – a segment of IBM Business Analytics dedicated to helping firms transform their business models in order to optimize outcomes through employing risk-aware decision making. I could not be more excited about this new chapter in which the best teams in operational and financial risk management have come together with IBM to build on the successes of their respective pasts and create an even stronger integrated offering for our clients, not only in financial services but across industry sectors shaped by an ever-shifting ecosystem.
IBM Risk Analytics is committed to thought leadership, but more importantly thought leadership that matters to the industries in which we operate. The June issue of TH!NK incorporates our past – in longstanding expertise areas such as CVA, counterparty credit risk, optimization, and curve fitting; and our future – with content inspired by IBM Smarter Analytics, IBM Banking Industry Solutions, and Social Business.
This issue is representative of the transformative changes through which you will see, over the coming months, the blossoming of IBM Risk Analytics as a true force in the risk community. In our early days we have already seen outstanding feedback on the power of our integration – especially of our close and growing relationship with IBM’s Global Business Services organization – from our clients in forums such as ARC 2012 and Vision 2012.
What is the appropriate response in times of uncertainty and conflicting views on future direction? TH!NK posits that it is evolution, but a particular kind of evolution that does not overlook historical wisdoms. I expect that by our next issue in November 2012, TH!NK will demonstrate even further the convergence of the best of Algorithmics, OpenPages and IBM.
To read the issue in full, click here.