IBM and Fair Isaac Ink Financial Services Alliance

The products will ultimately speed loans, present accurate risk assessments and finger fraudulent applicants.

Fair Isaac and IBM have formed a partnership that will help financial services firms better manage risk and improve customer service.

The "strategic alliance" will include joint marketing, sales and development of SOA (service oriented architecture) based technologies for the financial services market, said an IBM spokesperson, and Fair Isaac will optimize its next-generation decision management software for financial services for use with IBM middleware and hardware. The alliance will help financial services firms use technology to more accurately gauge risk, more efficiently manage customer data and offer faster, higher quality customer service, the two companies said.

The two companies are jointly developing decision management software that can help financial institutions use better analytics to help identify, evaluate and prevent excess risk, said Bob Berini, vice president, Fair Isaac. He said Fair Isaac and IBM were focusing on software that would streamline the loan origination process for banks, that could more accurately present a consumer or small business financial stability profile, address fraud and help banks and financial institutions with collections and recovery of past-due bills, loans and mortgages.

This alliance is part of IBM 's global open standards and SOA strategy that help customers get better ROI from their legacy software and hardware, regardless of brand, said Mark Hanny, vice president of strategic partnerships, IBM.

While Fair Isaac's software and IBM 's middleware are based on open standards and will run on industry standard hardware regardless of brand, Hanny said the end goal was to encourage financial institutions to standardize with the IBM brand. "We will, of course, respond to customers' needs, but the work we're trying to do is prove that this optimization gives customers the best performance they can get," he said.

Fair Isaac's next generation decision management software will be optimized for use with IBM DB2, WebSphere, Rational tools, Lotus and Portal, and the IBM System z and System p platforms, said IBM. The agreement will also allow Fair Isaac to embed IBM 's WebSphere, Lotus, DB2 and Rational tools middleware into its own software, said Berini.

Fair Isaac and IBM have partnered for years, Berini said, but since January of 2007 the two companies have been discussing a tighter integration of Fair Isaac's decision management software with IBM 's middleware stack and its hardware.

BlazeAdvisor business process management rules engine software will underpin the development of new joint applications with IBM, said Berini.

"Over the past year we've been telling our customers our plans for this integration," he said, adding that Fair Isaac was focusing on developing applications that could be used in a variety of industries, but that most current interest was coming from the financial services industry.

"For financial services customers, we're going to bundle our products with IBM middleware, and they will be pre-tuned and pre-tested to perform in the financial services environment," he said.

"We're developing on the IBM stack, period," said Berini. However, Berini added that Fair Isaac would do whatever it could to accommodate customers who were working with non-IBM software or hardware environments. "This is a heterogeneous world, and we'll try to meet [those customers'] needs, but our preference is, of course, IBM."

Judith Hurwitz, president of Hurwitz and Associates, a software strategy and analyst firm, said that the agreement makes sense for both companies. Fair Isaac's software includes commonly used analytical tools for financial services, while IBM has a lot of database and information management experience, Hurwitz said.

"IBM would like to have their customers stay within the IBM family, and Fair Isaac wants access to IBM 's sales force and their market strength," Hurwitz said. The IBM name would allow Fair Isaac to get their software into organizations where they might not otherwise be able to penetrate, she said.