Sell-Side Technology Awards 2019: Best Sell-Side Market Risk Product—Murex

Murex wins the category for the best sell-side market risk product in this year’s SST Awards, thanks to its MX.3 platform, taking the crown from last year’s winner, RiskVal Financial Solutions. One of MX.3’s focuses is on preparations for the upcoming Fundamental Review of the Trading Book (FRTB) regulation, which will require trading firms and banks to reassess their risk holdings. The platform helps firms perform risk calculations on an intraday basis and went live in 2017 even though FRTB’s implementation date is not until 2022. Bruno Castor, head of market risk at Murex, says the company has worked closely with clients for years to determine the best solutions to meet FRTB’s requirements. “We’ve invested heavily for a few years now in order to help our clients comply with the regulation, monitor and manage their risks accordingly, and we are just in the middle of it,” Castor says. “FRTB is a journey we are traveling with our clients.”

Even though the FRTB platform has only been in the market for a short time, Castor says Murex has already added important updates, particularly the newest texts around FRTB released in January this year that inform how calculations are made. He notes that despite the long lead time for FRTB, MX.3 will still be able to handle any new implementations of FRTB for each jurisdiction, because of built-in, flexible configurations within the platform. He says there are core components in the calculations related to risk, and those are baked into the platform, but because market risk constantly evolves, MX.3 needs to respond in near time to changes in risk calculations. This flexibility is important in the event that FRTB requirements change.

Murex is not waiting long to add more functionality to the platform. It is already working on updating some configurations around statistics.

FRTB has been long on the drawing board and implementations of the technology to comply with its tenets have been complex, so Murex has had to wade through many of the challenges associated with large projects with its clients. New processes like complex calculations occurring in the middle of the day as opposed to the end of the day, more granular risk buckets, and larger sets of analysis to parse through are challenges facing the industry. According to Castor, another challenge that Murex and MX.3 are helping to address is digital transformation. “If we look at the bigger picture, be it for regulatory projects, digital transformation or IT infrastructure modernization, banks are working on transformation and convergence IT programs, or have plans for those, where FRTB is one of the drivers. We developed our platform so that our clients are better prepared for all those challenges,” he says.