Algorithms give wham to BAM

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 28 Sept 2007

Algorithms, once the preserve of mathematicians, economists and market traders, are increasingly being incorporated in business intelligence (BI) and business activity monitoring (BAM).

Giles Nelson, director of technology at Progress Software, says industry areas that have been using complex event processing (CEP) software incorporating algorithms have been the capital markets and businesses with a need to do real-time risk management and compliance rules enforcement.

"CEP is starting to get some notice by the rest of the industry and, as a software area, it is beginning to show growth."

He adds that capital traders at JP Morgan, Deutsche Bank and at least one South African brokerage use Progress Apama software to discern patterns in a streaming data environment and execute trades.

A number of other vendors have similar products in the market and are actively targeting the BAM market. "That's all about real-time visibility into your information. It is for companies that want continuous insight into a whole bunch of processes in their organisation, for example payment processing between parties," Nelson says.

Here CEP looks for "exceptional conditions", for example, a series of small payments to the same account "that amount to a sum that should be subject to a whole load of compliance rules -such as anti-money laundering legislation".

Nelson says banks are also using CEP to monitor ATM networks and using it to predict when, in terms of usage, the machines will need replenishment. CEP also helps with performance monitoring and fault reporting, he says.

The British-based executive adds that the South African market seems ready for CEP. "From what I have observed in terms of the maturity of the market, SA is innovative. The client meetings have been very forward-looking, early adopter and so on," he says.