While more and more financial institutions are adopting and experimenting with risk management software as a service (SaaS), some are still struggling to leverage the benefits of the cloud.
SaaS-based solutions will particularly benefit Tier 2 banks, smaller banks, large buy-side companies and insurers by allowing them to focus on their core competencies, such as running a product business. derivatives.
Numerix hosts Oneview, its real-time financial market risk management system, on the cloud and provides ongoing operational services to ensure the software works the way customers expect it to work every day.
Nestor Nelson, chief information officer, senior vice president at Numerix, says that one of the challenges is finding an approved and reliable SaaS solution that solves one or more particular business cases, for example, the pre- front-office trading or risk reporting in various asset classes.
Another is to find a partner who is willing and able to customize the solution to their needs. Nelson says Numerix with Oneview meets those needs. Its SaaS product offering, combined with its operational management, provides companies with the reliability they need for stable business, while meeting ever-changing business needs.
Numerix’s SaaS solutions allow companies to access highly sophisticated risk management tools such as risk analysis, XVA derivatives calculations and pricing via the cloud rather than via an on-premises system. Over the past year, Numerix has recorded a 35% growth in the use of its SaaS solutions.
While Oneview is currently positioned as a front-to-risk system used in the front and middle office, Numerix is developing Oneview’s back-office functionality into a complete front-to-back system.
In line with aspirations to position Oneview as a front-to-back system, Numerix has introduced transaction lifecycle functionality so that Oneview can manage transactions throughout their lifecycle, including exercise processes over-the-counter transactions, barrier event processes, corporate actions adjustments and futures settlement. process, among others. It also added profit and loss analytics in Oneview, so customers can see their PL in a variety of sizes.
Numerix has further invested in cloud-native technologies for Oneview and NxCore Cloud, its cloud-based development environment. In the case of Oneview, Nelson says Numerix has created a cloud-native compute engine (CEC) which allows for horizontal scaling. “Wallets with hundreds of thousands of transactions can be assessed in minutes by on-the-fly computing infrastructure,” he says.
Using a serverless framework, CEC can instantiate 100,000 virtuals CPUs to distribute and execute calculations. Cost is also minimized as users only pay for what is consumed.
While many facets of Oneview take advantage of native cloud services, Numerix continues to seek other areas where it can do the same. Its recent partnership with Snowflake is an example. Nelson says the data scaling benefits of Snowflake will improve performance while reducing costs.
Our ability to erect a complete environment to the desired specifications to perform said calculations, and then dissolve everything once the request is met, reduces an incredible barrier for our customers.
Nestor Nelson, Numerix
Oneview and Numerix customers will benefit from a native cloud architecture. Some examples of customer benefits include simplicity, scalability, elasticity, performance, reliability, cost savings, and speed of deployment. At the same time, Numerix developers and implementation teams benefit in terms of architectural simplicity, auditability, speed of deployment, DevOps efficiency, operational efficiency and maintainability.
While Excel has been a staple for quants and financial engineers, scaling needs and increasing data set sizes can mean that managing these solutions can be quite laborious. NxCore Cloud provides a cloud-hosted development environment that handles infrastructure and deployment aspects for quants so they can focus on models and numbers.
According to Nelson, by leveraging the Python ecosystem along with Numerix Analytics libraries and pre-integrated data relationships, users can be up and running in minutes. “The resulting solutions can then be orchestrated through automation pipelines for large-scale delivery,” he says.
While NxCore is cloud native, over the next 12 months Numerix will add broader support for additional languages beyond Python, such as C++, .REPORTand Java, including sample reference workspaces with working examples to get users started.
NxCore Cloud can also be used to create “extensions” to Oneview to provide additional custom behavior not available in the core product, Nelson adds.
Numerix is also investing heavily in automating its delivery pipeline. Nelson asserts that infrastructure as code is a fundamental capability that is needed to innovate rapidly and deliver on demand to meet spontaneous business needs.
“Our customers come across scenarios where they may need to perform certain ad hoc backtesting or are asked to provide details to regulators for a particular day or period. Our ability to erect a complete environment to the desired specifications to perform said calculations, and then dissolve it once the request is met, reduces an incredible barrier for our customers,” he says.
Previously, this might require reconfiguring production or manually setting up a test environment. Now customers fill out a simple form and within hours the whole system is up and running, says Nelson. “There is no time spent in procurement to get the materials needed to meet demand,” he adds.
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