Of Special Interest

2nd September 2011

IBM to Acquire Algorithmics

IBM announced a definitive agreement to purchase Algorithmics, the Canadian risk software company that supply mainly banks, investment companies and insurers. The seller is part of the same group as Fitch rating agency.


25 of the top 30 banks and two thirds of the CRO Forum of leading insurers, use Algorithmics analytics software and advisory services.


IBM explained the rationale as expanding IBM's business analytics capabilities in the financial services industry by helping clients quantify, manage and optimize their risk exposure across a range of financial risk domains, including market, liquidity, credit, operational and insurance as well as economic and regulatory capital. The company believes that Algorithmics risk analytics software and services combined with IBM's acquisition of OpenPages and recent investments in predictive analytics will provide clients with the broadest range of business analytics solutions. Algorithmics risk advisers will enhance IBM's Business Analytics and Optimization practice. The Business Analytics and Optimization team has more than 8,000 consultants including 200 mathematicians with more than 500 patents and a network of analytics solution centers, backed by an overall investment of more than $14 billion in acquisitions in the last five years. Algorithmic's focus on credit, market and liquidity risk, as well as key customers in operational risk, will strengthen and expand IBM’s risk consulting.


IBM also referred to a recent Institute of Business Value survey of 1,900 global CFOs. It found nearly half believing that their finance organizations are not effective in the areas of strategy, information integration, risk and opportunity management.