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IBM Targets Risk Analytics with Two Acquisitions

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Posted September 1, 2011 By Paul Shread     Feedback

IBM adds to its $14 billion in analytics acquisitions with Algorithmics and i2.

IBM (NYSE: IBM) made a pair of acquisitions this week aimed at bolstering its fast-growing business analytics practice.

The $387 million acquisition of Algorithmics from Fimalac's Fitch unit will give Big Blue risk analytics software, content and advisory services for the banking, investment and insurance industries. IBM said Algorithmics will help financial companies assess risk, address regulatory requirements and make more informed business decisions.

IBM said the deal will help financial services 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 combination of IBM technology, including OpenPages and predictive analytics, and Algorithmics analytics will give companies integrated risk management so they can measure and assess operational risk associated with lending processes, market and credit risk exposures, IBM said.

More than 350 clients, including 25 of the top 30 banks and more than two-thirds of the CRO Forum of leading insurers, use Algorithmics analytics software and advisory services, according to IBM.

Algorithmics risk advisers will boost IBM's Business Analytics and Optimization practice, with more than 8,000 consultants and $14 billion in acquisitions in the last five years. The acquisition is subject to regulatory clearances and other customary closing conditions. With the closing of the acquisition, about 900 Algorithmics employees will join IBM's Software Group.

IBM also announced a definitive agreement to acquire i2 to accelerate its business analytics initiatives and help clients in the public and private sectors address crime, fraud and security threats. Financial terms were of the deal not disclosed.

With more than 4,500 customers in 150 countries, i2 – not to be confused with JDA's supply chain management unit – is a provider of intelligence analytics for crime and fraud prevention based in Cambridge, UK, with U.S. headquarters in McLean, Va.  i2's clients span the banking, defense, health care, insurance, law enforcement, national security and retail sectors, and are used by 12 of the top 20 retail banks globally and eight of the top 10 largest companies in the world.

The acquisition will help IBM clients analyze "big data" from disparate and unstructured sources such as social media, biometrics and criminal databases, and i2's intelligence analysis and tactical lead generation capabilities will help clients combat fraud and security threats, Big Blue said.   

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