The energy and commodities markets have seen major changes in recent years, transforming the way risk management technology is delivered to market participants. Whatever happens in the market, it is clear that all firms will be forced to deal with increased risk management analytics and reporting capabilities over the coming years. Today’s technology leaders are faced with the dilemma of having to provide more and more complex risk management transformation projects while also rationalising costs.
Moreover, the solutions landscape has been complicated by the development of piecemeal hybrid solutions composed of standalone platforms to accommodate firms’ business needs. Over time, firms have become more comfortable with buying vendor-based platforms to manage their listed and vanilla OTC products. However, in order to manage more complex exotic instruments and structured products they have also developed proprietary systems or relied on specialist vendors with expertise in advanced analytics.
In the context of a new regulatory framework and increased market awareness, delivering to risk management requirements remains a balance between immediate requirements and long-term goals. Topics such as better integration, real-time risk reporting and portfolio-wide stress scenarios are high on the immediate delivery agenda, but the solutions are often constrained by ‘as-is’ architecture.
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