Will History Repeat Itself?

By Alexander Makeyenkov and Manish Patel, DataArt

Waters magazine wonders if the financial industry has learned its lesson and solicits the opinion of DataArt’s experts on assessing the most pressing issues of concern: risk management and regulatory compliance. In a by-lined article for Water’s Open Platform, Alexander Makeyenkov, Senior Vice President of Capital Markets at DataArt, and Manish Patel, CEO of MP Capital, share their thoughts on the steps needed to transform the capital markets industry, making it more transparent and technologically advanced.

"To improve risk management, banks will adopt new technologies that federate systems on a global scale and provide, ideally, real-time calculation and response capabilities for processes that must meet new market velocities. As new regulations are implemented, the name of the game will focus on data quality, availability and reconciliation, and the technology tactics employed to meet these demands will mean significant foresight and integrated planning from the business and technology sides of institutions. Both areas require unique technology tactics, but they are driven by the common realization from the credit crisis that banks cannot operate in an insulated, opaque box-they must be responsive to the global markets."

"Modern models for complicated derivatives or structured instruments sometimes require highly intensive and time-consuming calculations. Even using optimized software services and powerful hardware, it is challenging to provide real-time risk assessment. Developing interpolation algorithms, with pre-calculated anchor points along a line of possible market movements, provides the ability for those assets with complex model algorithms to be included in real-time portfolio risk valuation. Performance at a global level increases the complexity even further. Two issues become extremely important for geographically distributed, enterprise-level portfolio risk management systems: adding more power to model calculations and efficiently delivering model data to end users in real-time."

Download PDF