Energy and Commodities Trading : Business-Driven Technology

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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