Buy-Side Technology Awards 2016: Best Buy-Side Risk Management Initiative Over the Last 12 Months—BISAM

The prelude to the initiative that landed this award started about two years ago when Paris-based Natixis Global Asset Management, with more than €750 billion under management, approached BISAM (FinAnalytica) for support around providing its High Net Worth (HNW) group’s portfolio construction team with web-based portfolio-construction functions to inform, validate and advance their clients’ approach and decision-making around asset allocation. BISAM built models according to the group’s needs, based on its platform flexibility and patented models framework. It took the firm two years to develop and implement an advisor-centric web portal—the Natixis Portfolio Clarity Web Portal—with the goal of delivering Cognity’s institutional risk management functionality to the world of retail portfolio construction.

The initiative had four phases: research and discovery, which included workshops to understand the project’s vision and requirements; the implementation of core portfolio evaluation capabilities, where BISAM engineered parallel metrics and calculations via its cornerstone application as a proof-of-concept for the digital version; web portal design and development, involving weekly workshops to understand various use-cases, and web portal development using an Agile methodology; and production release, support, training and continuous improvement. The benefits were significant: the ability to identify key drivers of risk, return, and diversification in a portfolio; a quantifiable approach to asset allocation and product selection; an iterative re-engineering process to better align investment strategy with investment guidelines; the establishment of a portfolio track record in order to test active portfolio management decisions; the consolidation of large universes of investments based on absolute and portfolio-relative criteria; and providing clients with access to proprietary peer-group data. 

A number of factors played a role in its success. Natixis and BISAM employees collaborated to select Cognity’s most appropriate models and features, and designed a portal with maximum usability, while given the competitiveness of the HNW sector, time to market was essential in terms of providing early, usable versions of the portal to drive fast iterations of enhancements based on advisor feedback. Finally, the ability to generate complex yet usable reports to deliver to HNW individuals during and after their interactions with Natixis was also crucial. 

Natixis and BISAM employees collaborated to select Cognity’s most appropriate models and features, and designed a portal with maximum usability, while given the competitiveness of the HNW sector, time to market was essential in terms of providing early, usable versions of the portal to drive fast iterations of enhancements based on advisor feedback.