Cloud solution provider of the year: Numerix

While more financial institutions are adopting and experimenting with software-as-a-service (SaaS) risk software, some still face challenges in leveraging the benefits of the cloud.

SaaS-based solutions will benefit Tier-2 banks, smaller banks, large buy-side firms and insurers in particular, by allowing them to focus on their core competencies, such as running a derivatives business.

Numerix hosts Oneview, its real-time capital markets risk management system, on the cloud and provides ongoing operational services to ensure the software runs as clients expect it to run each day.

Nestor Nelson, chief information officer, senior vice-president at Numerix, says one of the challenges is finding a trustworthy vetted SaaS solution that solves one or more particular business cases, for example, front-office pre-trade analytics or risk reporting across various asset classes.

Another is to find a partner that is willing and able to customise the solution according to their needs. Nelson says Numerix with Oneview meets those needs. Its SaaS product offering, combined with its operational management, delivers the reliability firms need for stable business-as-usual activity, while responding to constantly changing business needs.

Numerix’s SaaS solutions allow firms to access highly sophisticated risk management tools such as risk analytics, XVA calculations and derivatives pricing over the cloud instead of through an on-premises system. Over the past year, Numerix recorded a 35% growth in the use of its SaaS solutions.

While Oneview is currently positioned as a front-to-risk system that is used in the front and middle office, Numerix is building out Oneview’s back-office functionality to be a full front-to-back system.

In line with aspirations to position Oneview as a front-to-back system, Numerix introduced trade lifecycle functionality so Oneview can handle trades through their entire lifecycle, including over-the-counter exercise processes, barrier event processes, corporate action adjustments and futures settlement process, among others. It also added profit and loss analytics into Oneview, so clients can view their P&L in a variety of dimensions.

Numerix has been investing more in cloud-native technologies for Oneview and NxCore Cloud, its cloud-based development environment. In the case of Oneview, Nelson says Numerix created a cloud-native compute engine (CCE) that enables horizontal scaling. “Portfolios with hundreds of thousands of transactions can be priced in minutes by on-the-fly computer infrastructure,” he says.

By using a serverless framework, CCE can instantiate 100,000 virtual CPUs to distribute and execute the computations. Cost is also kept to a minimum as users only pay for what is consumed.

While many facets of Oneview take advantage of cloud-native services, Numerix continues to look at additional areas where it can do the same. Its recent partnership with Snowflake is an example of that. Nelson says the data-scaling benefits of Snowflake will improve performance while keeping costs down.

Our ability to erect an entire environment to the desired specifications to perform said computations and then disband the entire thing once the request has been fulfilled alleviates an incredible barrier to our clients

Nestor Nelson, Numerix

Both Oneview clients and Numerix will benefit from a cloud-native architecture. Some examples of client benefits include simplicity, scalability, elasticity, performance, reliability, cost savings and deployment speed. At the same time, Numerix’s developers and implementation teams benefit in terms of architectural simplicity, auditability, deployment speed, DevOps efficiency, operational efficiency and maintainability.

While Excel has been a staple for quants and financial engineers, scaling needs and increasing dataset sizes can mean managing these solutions can be very labour-intensive. NxCore Cloud provides a cloud-hosted development environment that handles the infrastructure and deployment aspects for quants so that they can focus on the models and numbers.

Nelson says by leveraging the Python ecosystem along with pre-integrated Numerix Analytics libraries and data relationships, users can be up and running within minutes. “The resultant solutions can then be orchestrated through automation pipelines for distribution at scale,” he says.

While NxCore is cloud-native from the ground up, in the next 12 months Numerix will add broader support for additional languages beyond Python, such as C++, .NET, and Java, including sample reference workspaces with functional samples to jump-start users.

NxCore Cloud can also be used to create “extensions” to Oneview to provide further customised behaviour that is not available within the core product, adds Nelson.

Numerix is also investing heavily in its delivery pipeline automation. Nelson says infrastructure-as-code is a fundamental capability that is needed to innovate rapidly and provision on demand to address spontaneous business needs.

“Our clients come across scenarios where they may need to perform some ad hoc backtesting or are asked to provide regulators details for a particular day or period. Our ability to erect an entire environment to the desired specifications to perform said computations and then disband the entire thing once the request has been fulfilled alleviates an incredible barrier to our clients,” he says.

In the past, this might have required reconfiguring production or manually setting up a test environment. Now, clients fill up a simple form and, within a few hours, the entire system is ready to go, says Nelson. “There is no time spent in procurement to obtain the needed hardware to address the request,” he adds.