Toronto-based Algorithmics is partnering with UK software firm Agena to add internal risk assessment functionality to its Algo OpRisk product.
Algorithmics says its new Algo OpRisk assessment module combines quantitative and qualitative data in a Bayesian scorecard approach.
The module utilises Agena's proprietary iRisk scorecard system which uses Bayesian probabilistic modelling techniques to interpret assessment questionnaire results to predict future losses. These quantitative results can then be used as input into capital calculation through Algo OpRisk's analytics module.
Algorithmics says with the new functionality, Algo OpRisk will enable firms to evaluate and rate risks internally, as well as prioritise and benchmark risk levels. In addition, the module integrates with the product's existing data and analytics applications to form a single Web-based enterprise-wide solution.
Michael Zerbs, CEO, Algorithmics, says: "Self assessment is increasingly coming under the spotlight as banks and regulators realize that the quantity and quality of loss data alone is unlikely to be sufficient for calculation of operational risk capital."
Norman Fenton, CEO at Agena, adds that the partnership can deliver a complete operational risk solution that addresses the needs of the Basel Accord's advanced measurement approach.