April 14, 2011 – Hewlett-Packard said that it is creating a global intelligence center on financial regulations, to try and attract capital markets firms needing to calculate the costs of complying with escalating and changing rules in the nations in which they operate.
The move, not yet formally announced, will pit Hewlett-Packard against SAP, Oracle and other global players in the market for what is generically called governance, regulatory and compliance software and services.
The GRC market has seen dramatic growth, since the financial credit crisis of 2008 and 2009, as companies prepare for waves of new rules guarding against future financial industry crashes, particularly in North America, Europe and Asia. The Securities and Exchange Commission and the Commodity Futures Trading Commission in the United States are preparing hundreds of rules, stemming from the passage last July of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Forrester Reearch estimated that the GRC market jumped from a $635 million market worldwide in 2009, to $749 million in 2010. The market, it said, had stalled out, after passage early in the decade of the Sarbanes-Oxley Act, until the crisis came along.
The Intelligence Centre is HP"s effort to give companies what has come to be called, in the field, an "enterprise-wide view of risk.''
The center will collect data on market, credit and operational risks, from disparate systems, according to Paul Lockyear, managing director, Enterprise Business Software Business Intelligence Delivery for HP. The numerical as well as text and other "unstructured" data will be aggregated to provide an "integrated and correlated view" of risks a securities firm faces, at any time.
New regulations will be translated into formulas that allow companies not just to monitor for compliance in their operations, but that will allow them to calculate costs. Lockyear said the expense of complying with each rule will be calculated and users can then roll up each such expense to, in turn, calculate the firm's return on capital, adjusted for risk -- or, more aptly, perhaps, risk reduction.
HP will separate itself from other players in the GRC market, such as SAP and Oracle, by its global reach and its ability to "optimize information" that gets used throughout a company, said Jay Wolstenholme, director, Capital Markets, Enterprise Business, for HP.
The same data that is used for operating a company, in any nation, will get "normalized and consolidated" and re-used for regulatory compliance and creating the enterprise view of risk, he said.
The intelligence center can be tested in a single nation, Lockyear said, before a company decides to use it globally.
HP described the Intelligence Centre at a roundtable discussion of capital markets issues at the Grand Hyatt Hotel here.
This story originally appeared on Securities Technology Monitor.
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