From consultations with existing clients and sector innovators across a broad range of industries over the past two years, Amelia strongly believes there is a clear need for a new generation of Operational Risk Management System (ORMS). This is supported by RFI's received by Amelia that stipulate functionality significantly beyond what is available from the current ORMS marketplace. In addition, feedback from Amelia's academic partners and research by leading figures in the global Operational Risk arena suggest that the next generation of ORMS must create a continuum between the qualitative and quantitative assessment of the risks that organisations face.

All of these considerations were thrown into sharp focus in January of 2001, with the release of the Basel II consultative document, which makes explicit the need for financial institutions to allocate capital for Operational Risk. Further clarification, via the introduction of Internal Measurement Approaches in the September 2001 Basel update, further supports the need for technically sound methodologies within any organisation's operational risk approach. Clearly, regulators have laid the foundation for the creation of a set of approaches of increasing complexity where the principle is the more sophisticated the approach, the lower the potential capital charge.

Amelia views Operational Risk as an integral part of any overall Risk management strategy. Unlike other more established Risk disciplines such as Market and Credit Risk, Operational Risk will be both highly procedural and qualitative. The OR2Q application was designed to address and improve the business process and facilitate effective capital allocations. In this way we believe Amelia will be enabling organisations to aspire to manage Operational Risk with the same professional disciplines and framework requirements as Market and Credit Risk.

It is Amelia's position that the OR2Q system will greatly assist our clients in meeting Corporate Governance and Regulatory requirements when implemented within their risk management and transaction processing framework. The combination of powerful Analytical processing and configurable client-level presentation layer will ensure that management is kept appraised of the sufficiency of internal controls and notified immediately of breaches in threat tolerance levels. Likewise, these same tools can be utilised to deliver targeted risk scorecard and performance indicator data to the lower levels of management, creating a higher awareness of control issues across the organisation.