Technology Solutions for ALM and Liquidity Risk Management 2009

In recent years most financial institutions across the globe have been preoccupied by credit risk and operational risk management initiatives. Much of the risk technology spending has been focused on Basel II compliance and improving the risk and finance technology infrastructure. Other key areas of spending have been derivatives technology, advanced analytics and financial crime technology. However, in the last 18 months, Chartis has observed a steady increase in demand for asset and liability management (ALM), liquidity risk and market risk solutions. Each of these areas has its own distinct demand characteristics and drivers. However, the most compelling trend is the requirement for more integration across these traditionally silo-based systems and the appetite of financial institutions to upgrade their relatively mature and outdated software applications.

On the demand side, Chartis forecasts the global market for ALM and liquidity risk management technology to grow to $684m by 2013, at a compound annual growth rate of 11.4%. The key drivers for growth will be:

  • Fundamental review of risk management functions due to the recent financial crisis
  • Renewed focus on liquidity risk management
  • Integration of ALM, ERM and finance systems - eradicating silo-based point solutions
  • Increased demand by the insurance industry
  • Cost reduction
  • Increased demand by emerging markets

On the supply side, technology vendors are positioning themselves to capitalize on this opportunity. The main players are coming from three different directions:

  • Established front-office and treasury management players such as SunGard and Thomson Reuters
  • Financial technology and ERP players such as Fiserv, Oracle and SAP
  • Risk and compliance players such as Algorithmics, FRSGlobal, Moody's Fermat and SAS

This report looks at both the demand and supply side of the market for ALM and liquidity risk management technology. It covers the main business and systems requirements, trends and best practices. The report also describes the competitive landscape and forecasts of market size and expenditure.

Vendors covered in this report include Algorithmics, Fiserv, Oracle, SAS, SunGard and Thomson Reuters.