Oracle Says Advanced Financial Software Intended To Reduce Bad Risks

By David Zielenziger | February 21 2013 5:21 PM

Oracle Corp. (NASDAQ:ORCL) announced Thursday three advanced software products for giant financial institutions intended to minimize risk, improve credit analysis and monitor capital requirements. The database products are intended for banks and Wall Street companies that suffered huge losses in the 2008 financial crisis.

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The Redwood Shores, Calif., company announced the products in New York, where it conducted a conference for top financial clients, most of which are already Oracle customers.

While clearly unable to prevent mistakes in business judgment, Oracle said the three tools, additions to its enterprise risk management suite, should promote a “proactive risk management culture” and lower costs of compliance with new U.S. securities laws and international capital requirements.

”The platform delivers a consolidated view across the enterprise,” said S. Ramakrishnan, group VP and general manager for Oracle’s financial services analytical applications. “The platform delivers a consolidated view of risk across the enterprise.”

Prices weren’t specified.

After the collapse of Wall Street investment banks like Bear Stearns and Lehman Brothers, investigators determined that many financial institutions had little or no knowledge of the total risk potential of their massive global investment portfolios. Even large banks like Goldman Sachs (NYSE:GS) used hundreds of employees to assess risk after then-CFO David Viniar became concerned before the worst of the financial crisis.

Oracle, as well as rivals such as Germany’s SAP (NYSE:SAP), International Business Machines Corp. (NYSE:IBM) and Tibco Software Inc. (NASDAQ:TIBC), have spent the past five years devising new applications that would assemble all risks in one place for analysis.

Oracle said its financial services model risk management tool should permit clients to assess flaws in their investment models and allow for constant assessment of risk. The credit risk management tool can take information from a variety of sources to quickly identify portfolio risk.

For banks, new Basel regulatory capital software is intended to assist clients with remaining current with the latest international banking standards with what the company said is a “ready to use” analytical solution.

Oracle said its software is used by all of the top 20 banks and insurance companies, nine of the top 10 securities companies, four of the top five mutual funds complexes and four of the top five stock exchanges.

Shares of Oracle closed Thursday at $34.28, down 73 cents. They’ve gained 3 percent this year.