Wachovia Taps Adaptiv for Credit Risk

LONDON—U.S. bank Wachovia is set to deploy enterprise-wide counterparty credit risk management software from the London-based Adaptiv division of SunGard, an official at the bank confirms.

The bank selected SunGard Adaptiv after a nine-month selection process, John Kosobucki, chief operating officer at SunGard Adaptiv, tells DWT. SunGard Adaptiv is expected to replace an in-house application, according to Kosobucki.

"Adaptive will replace a collection of in-house developed applications," Kosobucki says. "Wachovia looked at the total cost of maintaining their applications, and we showed that over a five-year period it would be less expensive for them to deploy Adaptiv."

Wachovia, based in Charlotte, North Carolina, will use Adaptiv Credit Risk to manage credit risk in corporate and investment banking, and its capital management groups. The solution provides credit risk analytics, collateral management and Web-based communications. It will help the bank's risk measurement methods comply with industry regulations such as Basel II.

SunGard Adaptiv will be used in Wachovia's New York offices, but will serve all Wachovia's offices around the globe. "Credit risk operations are run out of Charlotte," Kosobucki says.

SunGard will deliver Adaptiv on a hosted, application service provider (ASP) basis. SunGard will rent out to Wachovia the use of the software, which will be running on the bank's servers. Wachovia will use a thin client front-end application to access the service.

The deployment has already started and SunGard expects the software to go live sometime during the first quarter of 2007. "There is a limited amount of customer customization," Kosobucki says. "There are common areas of configuration such as workflow, product, portfolios and measures that will be part of the implementation."

SunGard, headquartered in Wayne, Pa., will be in charge of the development and deployment of the software. "There are more aspects of the implementation that are in our control," Kosobucki says.

"The decision to select an outsourced solution was one not taken lightly," says David Gaines, executive vice president for risk management at Wachovia, in a prepared statement. Wachovia did not return calls for further comment by press time.

Last month, the National Bank of Greece announced it was live with SunGard Adaptiv Operations, an over-the-counter (OTC) derivatives risk management and processing solution (DWT, March 20).