Datawatch targets Middle East banks

Report software and business intelligence tool vendor believes its local sales will soar as the finance sector struggles with compliance.

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By  Matthew Southwell Published  December 1, 2004

|~|Dubai Bank branch_m.jpg|~|Dubai Bank has already signed up for Datawatch’s Monarch report mining software.|~|Business intelligence and enterprise reporting vendor Datawatch has high hopes for the Middle East market as it looks to significantly increase the amount of sales it completes in the region. Having just signed Dubai Bank as a user for its Monarch report mining software and carried out a demonstration for Gulf Finance House, the firm’s focus is squarely on the banking sector. In particular, it hopes to cash in on the drive for compliance with the Basel II banking standards, which all financial institutions in emerging markets have to abide by within the next two years.

“Anyone that is in the business of banking has an interest in compliance,” says Robert Graham, product manager for Datawatch in Europe, the Middle East & Africa. “By 2007 every bank in emerging markets must be able to demonstrate it is Basel II compliant. However, the problem will arise for banks [in emerging markets] before then. For example, if they want to do business with banks elsewhere that are already compliant they may miss out because those banks may not want to accept the risk of working with a non-compliant bank,” he explains.

Datawatch’s Monarch offering helps bank’s achieve compliance by giving them easier access to their database and a greater ability to review and audit data. In terms of data integrity, a Monarch session provides an unchangeable snap shot of an organisation’s data, which helps both internal and external auditors, says Graham. Monarch also offers a range of functions including duplication, identification, rogue entry flags and the ability to drill up and down into data.

While Graham is confident that Monarch can address the technology side of compliance, he does admit that selling the product to banks can be difficult, as CIOs, IT managers and their staff often distrust outsiders wishing to investigate and impose standards on what they see as ‘their’ data.

“Some IT people are not very keen on us because they are not very confident about their data. Others do not like us because they think we take responsibility away from the IT team,” he says. “In reality though, we are there to help the IT team because we help them move the responsibility of generating reports onto business users and free up their time.”

Although Graham is still working on Datawatch’s go to market strategy, it will most likely be a mix of direct and channel sales. “The Middle East is a sophisticated market with sophisticated end users. Some of them like to deal with their preferred supplier and some of them like to work direct,” says Graham. “Companies like Citibank, which uses our products worldwide, always like to deal direct.”

Datawatch is not alone in attempting to cash in the compliance dollar. Storage vendors such as Hitachi Data Systems (HDS) have been weaving the need to store e-mails effectively and securely into their sales stories, while on the reporting side SAS Institute has been claiming its business intelligence (BI) tools can help local finance houses for some time.

“In the Middle East there will be a strong push for compliance as countries look to attract foreign investment,” says Basel Tutunji, Middle East country manager for SAS Institute. “With the worldwide push for compliance there is a trend for internal auditing and as organisation look to grow they have to have a system that does the checks and balances. SAS’s BI solutions help companies do this because it is all about the availability of information and ensuring reports can be developed accurately,” he explains.

While the vendors’ compliance pitch has yet to take hold within the Middle East, there are signs that an increasing number of organisations are starting to build it into their technology thinking. For example, although Egyptian American Bank’s (EAB’s) primary motive for deploying Oracle’s Financial Services Application (OFSA) was the desire to understand its customers more effectively, the fact that it could help in any future compliance drive did not go unnoticed.

“We needed a system that would enable us to collect and analyse all data around our customers’ behaviours and needs,” says Malcolm Neil, chief information officer at EAB. “However, we also see Oracle [as a tool] to extract data for everything else, from compliance reports through to data for the call centre,” he adds.

Whether compliance becomes front-of-mind for the Middle East’s financial sector in the short term remains to be seen. However, the good news for Datawatch is that global indicators are positive. Meta Group reports that 64% of companies currently have resources dedicated to financial regulatory compliance, with the average budget projected to be US$7.2 million. Among companies without a current budget, Meta says 54% plan to allocate money for compliance initiatives within the next 12 months — some of which will undoubtedly be set aside for reporting tools such as those offered by Datawatch, SAS and others. ||**||

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