Buy-Side Technology Awards 2015: Best Buy-Side Risk Management Initiative Over the Last 12 Months—IBM

The key here is a data play. This project has allowed the vendor to bundle its cloud-based Algo Risk Service with its integrated and cross-asset IBM Algorithmics Managed Data Service.

The combination, according to the vendor, “provides an holistic approach in combining static reference data—terms and conditions, corporates actions—with daily changing market data derived from rates or credit term structures and volatility surfaces, as inputs for instrument modeling, simulated data sets, and the provision of risk analytics.” That’s quite a labor of love.

The resulting data coverage numbers are particularly impressive: a 300 percent year-on-year increase in master data records, which now number 150,000. This complements new partnerships with major data vendors and deeper risk factor coverage for index, rates, spreads, foreign exchange (FX), volatility, inflation and commodities trading. Derived data components on the platform also utilize proprietary methodologies that provide control over data production, ensuring insight into their day-to-day behavioral changes and continuity of coverage in all scenarios, including during periods of extreme market events.

According to IBM, the major driver here is data management cost—and it’s a typical story. One major early client, going live with the integrated solution in November, is replacing its Bloomberg market data use with the Managed Data Service, reducing costs associated in this area.

After demonstrating Risk Analytics’ acumen on the sell side, with recent tier-one clients like Societe Generale and Scotiabank, the bet now is that buy-side enterprises are looking for the same level of dexterity around their core and derived data, and the analytics running on top of it. With this initiative, IBM now has the vehicle to get there. And make no mistake, it’s humming.

After demonstrating Risk Analytics’ acumen on the sell side, with recent tier-one clients like Societe Generale and Scotiabank, the bet now is that buy-side enterprises are looking for the same level of dexterity around their core and derived data, and the analytics running on top of it.