Perhaps showing just how difficult compliance can be for banks and brokers in today’s regulatory environment, for the sixth straight year we have a new winner in the compliance category, with Imagine Software taking the top nod for 2018. This is also likely an indicator that targeted solutions are needed to handle this sea of new regulatory obligations.
Take, for example, the Fundamental Review of the Trading Book (FRTB) and the Comprehensive Capital Analysis and Review (CCAR) rules, which, in part, require firms to perform enhanced stress-tests and provide empirical metrics, such as historical value-at-risk (VaR), in real time, by individual clients. And that’s just the start—the data needs to be sliced and diced in a variety of ways. It’s a daunting task and one that Imagine’s clients were asking for help with. The result is Imagine’s Real-Time Risk & Compliance (RRC) solution.
RRC tracks regulatory limits and investment risk, identifies potential intra-day breaches of capital utilization limits, and aims to provide consistency between start-of-day, intra-day and end-of-day P&L and risk metrics, across various asset classes. “Transparency is the new gold standard for risk systems,” says Scott Sherman, Imagine co-founder and global head of business development and sales, adding that banks need flexible and scalable risk solutions that can produce stress-test results for multiple regulatory regimes.
An early partner on the build was Societe Generale Prime Services, which was looking to improve consistency between intra-day and end-of-day P&L. Didier Livio, global head of prime services risk for SocGen, noted in a statement that RRC “really is real time and integrates calculations across all asset classes.”
Looking ahead, Imagine is looking to help clients comply with the US Securities and Exchange Commission’s 22e-4 liquidity rule, which relates to accessing the data necessary to report liquidity buckets on a portfolio of diverse asset classes, scheduled to go live in December. “Imagine not only summarizes and classifies portfolios by the required liquidity levels, but our core methodology enables each position to be delineated by liquidity levels. The rules and classifications are customizable and easily maintained in client-tailored dashboards,” says Sherman.
And, of course, firms across the globe are increasingly realizing the burden that the General Data Protection Regulation (GDPR) presents. Imagine’s platform provides features to protect client identities, while still providing data that users need, says Lance Smith, Imagine’s co-founder and CEO. “Clients do not need to send any account numbers, client names or other identifiable information, such as internal client references. We can use anonymized data, while clients retain their own identifiers,” he says.
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