Risk data repository of the year: NeoXam Singapore

Asia Risk Technology Awards 2020

Tim-Versteeg-NeoXam
Tim Versteeg, NeoXam

It has been over a decade since the global financial crisis, but compliance remains one of the biggest challenges facing financial institutions everywhere. Enhancements to existing regulations and the addition of new ones continue to weigh on firms, even as they struggle with rising costs.

One of the biggest challenges firms are facing is aggregating and managing vast amounts of market and risk data, to report financial risk numbers to regulators accurately. Enhancements to rules and regulations have meant that firms have had to deal with greater volumes of complex data, and new ways of exchanging data and documents.

NeoXam’s DataHub solution has helped financial institutions make their risk management and reporting more efficient. DataHub enables firms to plan and manage data flows with a data quality monitoring system that’s based on a single, centralised source of data. It also helps them automate and scale their compliance operations by reducing costs and increasing compliance speed.

Tim Versteeg, managing director at NeoXam, refers to DataHub as a “white box solution”, saying it is an agile and scalable solution that strikes a balance between out-of-the-box flexibility while ensuring full governance and lineage.

Banks use DataHub to backfill, proxy and validate market data histories, and generate historical and stress scenarios, which are then fed into their respective trade risk-management systems.

For example, one large regional bank has been using DataHub to support its market data management efforts. It first selected NeoXam for its market data solution (MDS) in July 2019. This relationship was later extended to comply with initial margin regulations, as well as the requirements under the Fundamental Review of the Trading Book (FRTB).

The DataHub MDS solution for the bank has been extended with a risk data management module – market risk-data solution (MRS) – to build a risk data repository and cover new asset classes. The module leverages validated reference data and current business day market data. In the case the data includes newly traded risk factors, MRS will generate stress scenarios and backfill prices, or rates to generate historical scenarios for market risk calculations.

Another large regional client uses DataHub as its enterprise market data solution, using it to automate its data processes to comply with FRTB requirements. The solution will also be used to store back calibrated risk factors to create a single repository of all historical risk data. It is also used for independent price-verification checks, allowing the client to monitor and verify off-market rates to ensure rates cited by institutional traders are within the range of allowable prices.

DataHub collates all trades, identifies the type of product traded, then checks automatically whether the trade price quoted is within the acceptable range, as determined by benchmarking them to on-market rates.

In the next 12 months, Versteeg says NeoXam will focus on standardising its solution to better user experience and integrate its solution with cloud technology.

It recently updated its standardised configuration to meet requirements such as the Monetary Authority of Singapore’s annual industry-wide stress test, and BCBS-457 updates, which deals with the minimum capital requirement for market risk. This will help speed up implementations and deliver already-tested functionalities to future clients.

“As we continuously strive to make users’ experience better, we are working on further improving our user interface and workflows using technologies such as VUE.JS with HTML5, CSS and D3.JS to enhance our navigation and keep the user experience simple and highly performant, despite the growing volumes of data to cope with,” he says. The improvements were enabled by NeoXam’s 2018 acquisition of 100M Digital Reporting Platform, a portfolio management and digital reporting platform for buy-side firms.

The acquisition has allowed NeoXam to strengthen its data management offering, reporting capabilities, and user experience by using 100M’s data analytics and visualisation interfaces.

NeoXam also fully integrated with Amazon Web Services last year, making its solutions cloud-ready. Over the next 12 months, it will add the same functionalities with Azure and develop a geo-distributed architecture in the cloud.

“As we continuously update our existing connectors and standardise new ones, we will also improve our real-time connectors (TREP, BPIPE) to better serve our clients in need of more timely data,” Versteeg adds.

The coronavirus pandemic has led to an acceleration of banks looking to improve their existing market risk infrastructure. “Due to the many restrictions in place, there has been an increased appetite for our managed services options, whereby NeoXam takes on services remotely,” says Versteeg.

NeoXam will also continue investing in its Asian teams to support its solutions in Beijing Hong Kong, Shanghai and Singapore.

Judges for this category agree that NeoXam’s product is compelling as it is highly customisable and flexible, which is “great” for end-users.

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