10.11.2011
By Terry Flanagan

Risk Technology Bridges Silos

Misys Risk provides tool to make real-time decisions.

Technology is emerging to enable capital markets firms to bridge product-based silos and gauge risk on an enterprise level.

Institutions need to adapt to the new reality of volatile liquidity, credit, and market conditions, in order to control costs and remain agile.

“They need to aggregate risk information across silos quickly and at the same time they need risk management that is closely interwoven with the business,” Karim Blanc, head of risk management solutions at Misys, told Markets Media. “To address this, we needed to take a step back from the traditional divide between enterprise risk systems and trading risk systems.”

Misys’ newly-launched Risk product is designed to measure, control and manage risk across multiple asset classes, instruments, portfolios and systems.

Misys Risk allows the user to access information from all processes in real time, the company says. Risk analysis for VaR, stress testing, scenario generation, portfolio “slicing and dicing” and limit checking can occur on demand. Scenarios are generated once and then used consistently as the single source across all systems.

“Misys Risk centralizes all risk parameters and connects to the various silos in order to provide a unified view,” Blanc said.

Risk managers can define a cross-market, cross product stress scenario, apply it in all silos, and get back a single risk measure, Blanc said. They can then identify which portfolio or product the main risk comes from, whether from one or from several silos.

“Basically, the silos become transparent to the risk manager,” said Blanc.

The objective is a seamless risk process, reducing operational risk and costs. “They can now improve the integration of risk and trading and introduce new products faster without compromising on controls,” Blanc said. “They can also switch more easily and more quickly from the global risk view to the trader view and back.”

Misys Risk is compatible with Summit FT, Misys’ cross-asset front-to-back trading and risk management system specializing in derivatives and structured products.

“Misys Risk and Misys Summit are independent systems sold separately, but they do interact closely if installed together,” Blanc said. “Misys Risk will use the models and data from Misys Summit to build its global risk measures, and will provide risk services to the Summit users. The interaction will be supported out of the box.”

Related articles

  1. Banks' Risk Management Seen as Lagging

    Market-Implied Probability of Default provides an early warning signal by quantifying market sentiment.

  2. climate change is top for the first time since the inception of the EY and IIF survey.

  3. Open interest in Sonia futures and options has reached a record.

  4. Average daily volume in CME’s U.S. Treasury futures and options grew more than 30% year-over-year.

  5. Banks' Risk Management Seen as Lagging

    The firm's financial risk monitoring services had a 400% increase in demand since 2020.