Risk Management Online.

Risk management systems have been moving to the Internet, and one software provider, Theoretics, claims it can deliver a full-blown system to track and monitor risk exposures for a fraction of the cost of competitors' systems -- as little as $3,500 a month for a complete license.

The privately held firm, in Park City, Utah, has been providing risk management consulting and software since 1994 and has signed up a number of major companies, including PepsiCo, GMAC Mortgage, SunTrust Banks and Zurich Capital Markets. Chief executive Blaise Labriola says Theoretics' Telemark Risk Management System tracks fixed-income products ranging from bonds and mortgages to swaps and swaptions, caps/floors and currencies. Client companies can link the system to their in-house client-server networks or use Theoretics' Internet platform.

Unlike CFOWeb or TreasuryConnect, companies that provide an online marketplace for such products to facilitate transactions, Theoretics is designed to handle all risk management activity, including tracking of trades and payment, mark-to-market activity and value at risk. It also calculates hedge effectiveness for derivatives transactions subject to FAS Statement No. 133.

Labriola sees the Internet platform for risk management growing slowly, chiefly because of security concerns. "When you talk about having a system purely online, no one wants to move in that direction. They want the option of using an Internet system with their in-house accounting system," he says.

Theoretics uses a series of modules covering product types, Labroiola says, and will soon be bringing out equities and credit modules -- the former including stocks and off-balance sheet swaps, options and futures. Individual modules can cost as little as $1,000.