With growing regulatory requirements and more complex investor demands, fund managers need their risk management software to do more than ever before. We consider the latest challenges facing our customers.
What is the greatest trend driving today’s market?
The biggest trend influencing decision making has been the increase in complexity and the divergence of global regulatory frameworks. While EU markets are already being reshaped by MiFID II, in Hong Kong increased regulation is due through the upcoming FMCC changes later this year. Large uncertainties remain over the global impact of Brexit and potential regulatory changes mooted by the current US administration. Funds need to be prepared to deal with the challenges in creating a globally coordinated approach to understanding and reporting financial risk.
What other trends have our customers reported?
There has been an increase in demand from investors for risk reporting which can be tailored precisely to their needs. Additionally, emerging technologies such as machine learning are introducing enhancements to the way risks can be identified, analyzed and managed.
What capabilities has Linedata Derivation developed to address these challenges?
Increased regulation and investor demands require total flexibility and configurability in reporting. Linedata Derivation has been built with this in mind, with our sophisticated reporting tool allowing customers to create their own suite of automated, tailored reports to meet investors’ requirements. Our extensive risk capabilities include the calculation of Greeks, real time shocks and configurable stress testing, VaR and fund performance measures. With transparency built in to our calculations, fund managers can have absolute confidence in their reported figures. Our customers are increasingly using a range of tools across the Linedata product range and we have been working hard to incorporate Linedata Derivation seamlessly with these other solutions. On our development roadmap is the integration of Derivation with Linedata Clarity, our new desktop and mobile dashboard solution for portfolio managers, as well as the development of a new modern user interface for Derivation using the latest web technologies. Financial applications are amongst the most complex systems in the world. In designing these new interfaces our emphasis has been on providing a seamless, transparent workflow to give users a truly modern and positive user experience, whilst preserving a sophisticated capability.
What opportunities are there for customers in reviewing their risk management processes?
The need to review how risk is managed brought about by changes in the market environment provides a great opportunity for funds to streamline their processes. The flexibility of our risk solutions allows for better management of risk data and more efficient processes, helping to improve customer services and outcomes and controlling costs.