Justin Taylor, Managing DirectorGlobal market turmoil and tougher regulation continues to be indicative of the Risk Management and Compliance Space. Organizations are faced with the need to apply risk mitigation strategies that deliver against a background of complex new regulations and short compliance timeframes. Small companies often don’t have the expertise or time to invest in complex risk management systems. Large companies often struggle to implement risk systems in a cost effective manner. Headquartered in Sydney, Australia, Vector Risk provides software solutions in the trading risk management space. Their solutions calculate a variety of treasury, market risk, and credit risk measures in real-time.
Nowadays, the cloud gives software companies the opportunity to deliver applications as a service rather than installing them on the customer’s servers. Software as a Service (SaaS) commoditizes applications enabling them to be delivered and supported at a fraction of the cost of traditional installed systems. The Vector Risk Service is a cloud based risk service hosted on Azure that client’s access through a browser. “When a client subscribes to the Service we provide them with a login and they can start using it straight away, no hardware and no implementation,” says Justin Taylor, M.D., Vector Risk.
The Vector Risk Service offers innovative solutions that meet the unique needs of risk management in the traded markets. Revaluations, margins and risk measures for traded instruments specifically market risk measures like Value-at-Risk, Expected Shortfall and stress testing are some of them. As well as risk functionality for traded markets it also provides access to vendor supplied rates for independent valuation. The Vector Risk Service utilises a true multi-tenancy software as a service model combining the power of a tier-one high performance risk engine with the cost and time savings of SaaS. The confluence of high performance computing and true multi-tenancy software as service technologies allows subscribers to run complex risk calculations simply and affordably.
The uniqueness of the service, along with their client centric approach helps Vector Risk stand out from the rest. Multi-tenancy refers to a principle in software architecture where a single instance of the software supports multiple subscribers.
Having fast analytics that utilize vectorisation enables real time results at portfolio level not just trade by trade which has significant implications for CVA
Each subscriber has a group of users sharing their organization’s view of the risk software. So while the hardware is shared, the organization’s data and configuration remains private. The single instance of the software is seamlessly and continuously upgraded. A continuous stream of additional instrument and risk functionality is delivered to the subscriber at no additional cost. Development costs are included in the subscription and implicitly shared between subscribers. This means subscribers are never left behind on outdated versions of the system.
Vector Risk is a true deliverer of multi-tenancy software on the cloud. This software drives down costs and minimizes implementation efforts. “Having fast analytics that utilize vectorisation enables real time results at portfolio level not just trade by trade which has significant implications for CVA,” says Taylor. Vector Risk constantly reinvest in the software. “We try to anticipate customer demand for new functionality and leverage the opportunities the new technologies provide,” adds Taylor.
“We are really investing in enhancing our ability to seamlessly deliver third party market rates as part of the service,” says Taylor. For smaller clients the cost and challenge of managing the market rate collection process necessary for independent revaluation is significant. Being able to incorporate this in their subscription makes the service lot more attractive.
Since inception, Vector Risk has been anticipating customer’s demands for new functionality. “We are focusing a lot of attention on initial margining calculations and our ability to perform both Basel III standard and internal model calculations,” Taylor concludes.