AFTAs 2015: Best Risk Management Initiative—Citadel

Citadel's Risk Center allows the firm to manage risk across all of its portfolios from a centralized location.

citadel-risk
Paul Masini, Tina Toledo, Muggsy Bogues, Alexander Lurye, Savo Bakrac

Many firms talk about the importance of risk management, but few have put their money where their mouths are the way Citadel has with its Risk Center, a project that helped earn the Chicago-based global asset management and hedge fund group the award for the best risk management initiative at this year’s American Financial Technology Awards.

Last year, Citadel launched an initiative designed to help risk and portfolio managers to better visualize risk exposures across the entire firm and the asset classes it is active in. The result was the Risk Center, a 1,500 square-foot facility that sits on the 37th floor of Citadel’s Chicago headquarters.

Inside the Center are two enormous, curved touchscreen displays.The first floor-to-ceiling set of displays is 365 inches diagonally; it details risk information from the firm’s asset management business, incorporating equities, credit, commodities and fixed-income securities. It also monitors operational readiness and capacity. The second display is 165 inches diagonally. This screen details Citadel’s market-making activities, operational readiness, and network connectivity related to Citadel Securities, a global market-maker for equities, options, futures, fixed income, derivatives and foreign-exchange markets. 

By touching the screen, risk managers are able to drill down into various business lines to view, in real time, the risk exposures and guideline utilizations for any of the firm’s portfolios. Different colors indicate stability or a cause for concern that demands action. To go along with the screens, Citadel had to install customized hardware and software and develop new visualization tools.

The Risk Center serves as a central hub supporting and strengthening Citadel’s risk management practice. 

Citadel’s risk management team can also use the screens to discuss portfolio risk with business leaders and management. Risk managers utilize the Risk Center to monitor risk exposures and guideline utilizations, aided by the Risk Center’s interactive and visual representation of the information, as well as to discuss portfolio risk with business leaders and management.

Last year, Citadel launched an initiative designed to help risk and portfolio managers to better visualize risk exposures across the entire firm and the asset classes it is active in. The result was the Risk Center.

It’s a massive endeavor that combines hardware, software, a data analytics platform, and visual representations, delivered via two elegant, floor-to-ceiling touchscreens, all of which was built in nine months. 

 

 

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