Best use of cloud: Torstone Technology

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RMTA22-Winner
Brian Collings, Torstone Technology 2022
Brian Collings, Torstone Technology

Torstone Technology’s Torstone Risk platform has brought to market an innovative and cutting-edge solution to make processes faster and more efficient through its library of over 150 credit, fixed income, foreign exchange, equity and commodity derivative pricing models – all hosted in a managed cloud environment on Amazon Web Services.

Torstone Risk is a real-time streaming, cloud-based, software-as-a-service (SaaS) platform that integrates natively with Torstone Post-Trade, providing risk metrics that tick with live positions and profit and loss. A contemporary web app dashboard provides firms with a ‘live risk’ view and the ability to navigate risk positions, primary and time-bucketed exposures, higher-level risk metrics such as historical value-at-risk, expected shortfall and stress scenario results.

Benefits include that solutions, such as pricing calculations using the models, can be parallelised across as many compute nodes (processors) as are required to complete a given set of calculations in a desired timeframe. Without this flexibility, execution time typically becomes very long and therefore risk calculations increase, eventually to the point that the required risk report arrives later than when it is due.

The use of the cloud to scale the number of compute nodes being used dynamically at run-time means one is able to perform large risk simulations within a relatively short timeframe.

Furthermore, pricing a given security using a particular pricing model typically requires a significant amount of market data and security terms reference data. With the cloud connectivity in place, the user can automatically pull down all dependent market and security terms data from Torstone’s cloud data services.

Torstone has also built an add-in for Microsoft Excel so users can perform ad hoc analysis using the cloud-based model library. Traditionally financial models are made available in Excel by embedding them as dynamically linked libraries that Microsoft Windows understands.

The solution is innovative because both the primary risk dashboard interface (a contemporary SaaS-based web application) and all supporting data services and model libraries are in the cloud, making it easy to ‘spin up’ new risk infrastructures when new clients are onboarded.

The cloud services can also be correctly sized to the risk requirements of the client, whether that be the number of open trading positions, amount of historical data, number of stress scenarios, complexity of the securities being traded, and so on.

It is also innovative because the utilisation of the available nodes can be optimised to nearly 100% while they are running. Data transparency, cloud analytics, hybrid pricing interoperability and real-time risk are some of the benefits Torstone’s unique solution provides.

Unlimited access to all market data, reference data and derived output risk data uniquely provides firms with transparency. In addition, Torstone Risk is built on a distributed real-time risk engine that allows risk to be recalculated when market data, security reference data or trade positions update. With fast cloud pricing services, post-trade risk has never been so close to the point of execution – it is a true ‘front-to-risk’ management platform.
 

Judges said:

  • “Nice scalable cloud analytics use case.”
  • “Seems like a strong cloud-based risk system.”
     

Brian Collings, Chief Executive of Torstone Technology, says:

“The cloud is an incredibly powerful tool, which is transforming financial services technology. Winning such a prestigious industry award for Torstone Risk is a fantastic acknowledgement of our risk management credentials, using cutting-edge data, analytics and modelling to help clients manage and mitigate risk.”

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