eRisks Raises $14.5 Million

As the Internet becomes a more popular medium for the distribution and hosting of risk management tools and applications, eRisks.com is expanding to take full advantage of the online mania with a technology makeover. Thanks to a recent $14.5 million round of funding from investors, including Aventic AG, Risk Management Solutions, Inc., Katalyst Venture Partners I and Internet Finance Partners, eRisks aims to provide fully integrated enterprise risk management services. With the funding, eRisks, which is made up of a consulting group and the eRisks.com portal site, is looking to expand its online offerings with an ASP model and an online risk transfer exchange. The site currently offers daily news, risk management case studies, online risk analytics, benchmarking data and risk transfer solutions.

"We're developing two additional parts of the business," explains James Lam, founder and president of eRisks. "One is an ASP-type option that would provide risk management analytics, monitoring and reporting with the goal of giving the clients a risk management dashboard to look at all the risks within a company." For the ASP model, eRisks is working with risk management vendors to develop data standards for credit, market and operational risk models in their current systems. eRisks would then provide the "top layer" for the firms' risk systems to bring together credit, market and operational risk for an integrated view across the enterprise.

"For Clients that already have risk management systems in place, we would develop an interface between their systems and the data standards," says Lam. Through the interface, the user could then calculate their risk using the eRisks standard and receive an overall common currency to compare risk through economic capital. "The data standards would allow for the interface between the systems and our ASP and we would have the methodologies to take the standards and translate them into economic capital and integrate it into a risk dashboard," describes Lam. This risk dashboard would be a measure of market, credit and operational risk across the organization. Lam adds that eRisks is in the process of talking to "the leading vendors," but no definitive agreements have been signed. He expects a beta system to be offered by the end of this year.

The second major technology investment will focus on eRisk's proposed risk transfer exchange, which is set for development further down the road than the ASP model. "Clients using the exchange without the ASP model would treat this like any other marketplace," says Lam. "But clients using both the ASP model and exchange would have the benefit of looking at their enterprise-wide risk before going into the exchange and executing their transfer strategy." In the meantime, eRisks, which currently has over 9,000 registered users on its site, will unveil an enhanced version of its portal site on October 19th.