Background

Creation of IRIS integrated risk management AG

The vision of a generic approach to financial analysis allowing replacing the myriad of organically grown partial analysis systems by a single unified financial analysis infrastructure was developed by Dr. Willi Brammertz and Dr. Jürg B. Winter in the 1980's.

On one hand it was triggered by the ongoing integration process of the various partial bank operation systems into core banking solutions as developed in those days by WINTER PARTNERS AG in Zurich – an integrated core banking solution firm founded in 1970 by Dr Winter. On the other hand it was inspired by the research work and thesis of Willi Brammertz on integrated risk management.

In order to address the identified analysis need of European banks, especially for new Asset and Liability management solutions, Drs. Winter and Brammertz created IRIS integrated risk management ag in Zurich in the early 1990's. The goal was to become a leading implementer and consultant of risk management solutions based on a third party US tool. IRIS’s domain expertise brought very rapidly a substantial number of very satisfied implementation and consulting customers.

Origin of the first generic IRIS financial analysis solution

After a detailed analysis of the market and the accumulated international implementation and consulting experience, and to become independent also at the product level, IRIS decided in 1993/94 to execute its vision of a generic unified analysis infrastructure in starting the development of the corresponding financial and IT technology framework which would lead to a new generic unified financial risk and profitability analysis solution. Key requirements to the framework were:

• Intuitive and easy use, implementation and upgrade of the analysis methods
• Consistency of the result from all views in all granularities
• Ability to calculate the impact of various risk simultaneously and profitability
• Ability to handle all types of products/instruments with open structures allowing implementation of new products/instruments consistently
• Open to all types of accepted valuation methods
• Consistent historic, static and dynamic analysis
• Modularity allowing each customer to use (and pay) only for his specific needs
• Scalability in terms of architecture and processing volume from standalone PC to large networks of processors
• Customization rather through modeling than parameterization

The realization of the framework is based on 2 main new constructs: a generic contract data model based on standard expected cash flow patterns consisting of elementary "Basic Contract Types" and a number of "Combined Contract Types" (i.a. for derivatives and options). These are the basis for calculating value and revenue for any granularity, contract, for any point in time/interval, any market scenario, and any strategy for any accepted valuation method. Secondly a single calculation engine generating the risk adjusted cash flows in function of the wanted assumptions and strategies.

The resulting solution was named riskpro™ (from Risk and Profitability).
The first productive implementation based on the described frame work was riskpro™ version 1.0, which was brought to the market in 1997. This first version addressed mainly the ALM and market risk analysis requirements (including Basel I) which were top priorities for many European banks in these days.

On going riskpro™ development

Based on the described framework, IRIS continuously increased the number of covered financial products and analysis methods, based on general market requirements and specific customer requirements, resulting in successive new versions of riskpro™. In terms of analysis methods the scope was extended with profitability analysis (including fund transfer pricing), credit risk, Basel II, IFRS39, and in 2006 operational risk analysis. These analysis are based on a state of the art, market proven, Swiss solution, complying also with the Basel II requirements. In parallel to these extensions the GUI, the reporting and extraction capabilities, the tools for integration support (ETL), the calculation speed and precision were also continuously enhanced.

This unmatched scope attracts on one hand new customers who have decided to implement step by step a unified single analysis infrastructure. On the other hand it brings many of riskpro™’s current partial users to expand their scope of use. This brings them in significant cost savings (interfaces, licenses, suppression of reconciliation activities), transparency and better data for better strategies and decisions (risk adjusted budget, liquidity planning, pricing, etc)

Expanding the IRIS solutions framework to other industries

Today riskpro™ is a trusted solution used by over 230 financial institutions in over 20 countries, which IRIS continues to expand according to market and customer needs. However because of its generic framework riskpro™ satisfies the analysis requirements of insurances, corporations and governments. In the insurance, reinsurance and pension fund area in particular the IRIS approach supports best practice and the emerging requirements of Solvency II.

About IRIS: an entrepreneurial customer centric organization

IRIS counted at the start a dozen of vision driven contributors, mainly focused on consulting and the passion for developing a new generic analysis framework. Over the years IRIS has also developed a passion for the customers as a customer focused solution and know how provider and partners. Today IRIS counts over 100 financial engineers, actuaries, business analysts, IT engineers and developers, consultants, project managers, sales and marketing persons, all committed to the short and long-term benefits of the customer by the efficient implementation and use of the IRIS financial analysis solutions through efficient, knowledgeable and quality oriented professional services and the continuing support from the IRIS Academy.

The IRIS marketing and sales, implementation, consulting, training, implementation activities and first-level support are performed globally out of Zurich (head office and IRIS Academy location) and locally by a number of qualified, globally spread IRIS Partners. Research, technical developments and maintenance are done out of Zurich and Lausanne (Switzerland) and sister companies in Eastern Europe.

IRIS integrated risk management ag and its local sister companies are an independent, self-financed, profitable Swiss private group owned by its founders and a small number of key contributors.