Risk.net September 2016

RISK MANAGEMENT • DERIVATIVES • REGULATION

Murex dominates rankingsVoted overall #1 for the fourth consecutive year

Reprinted from

1 risk.net September 2016

As Asian banks struggle with a raft of new regulations and market practices, they are increasingly turning to technology vendors to

help them implement speedy and cost-effective solutions. New rules such as those for over-the-counter derivatives margining and clearing, a standardised approach for counterparty credit risk (SA-CCR) and the Fundamental review of the trading book (FRTB) are challenging not only in terms of their complexity, but also in the systems performance required for their calculations. Institutions that have made an early start and have the vision and resources are taking a strategic approach to the new regime, while others are having to make more tactical moves to meet deadlines and remain competitive.

“A narrow majority of local and regional institutions are tackling the new regulatory requirements on a piecemeal basis, at least in a first stage, focusing primarily on compliance,” says Guy Otayek, chief executive of Murex Asia-Pacific who is based in Singapore. Murex once again fought off competition from the other leading global derivatives trading and risk management vendors to take the top spot overall in the 2016 Asia Risk technology vendor rankings. Many other local and regional institutions, including larger firms, are looking at tackling the regulatory question more strategically, starting with the unification of data repositories and valuation engines for initial margin and credit and market risk capital needs.

“These institutions’ view is that regulators will expect consistency and transparency across all new capital charges and ratios, and putting in place a [unified] regulatory calculation engine is an efficient step in that direction. It also brings operational efficiency and much-needed improve-ments in computation performances. The institutions want to give themselves the means to manage proactively their funding and capital costs at the enterprise level,” says Otayek.

Keeping abreast of the market and regulatory evolution requires significant investment in research and development on the part of vendors, says Otayek. As well as building this expertise into its products, Murex is increasingly sharing it with its clients via a service it calls RegCap Lab. For example, it has been advising a number of its clients on regulatory capital matters, and supporting their efforts to produce quantitative impact study results, or assisting them in their capital impact assessments by quickly

running FRTB or SA-CCR computations on their positions.

A leading regional bank has just imple-mented Murex’s MX.3 platform and is extending its enterprise risk and collateral management functionality to cover the calculation of SA-CCR exposure at default for all derivatives in its global markets and private banking activities for the January 2018 regulatory deadline. “In parallel, the bank is starting to plan its FRTB programme and as a first step is using our RegCap Lab to assess the scope [of the project],” says Otayek.

The issues that financial institutions have faced over the past 12 months are not going away any time soon, and the indications are that banks and others will rely increasingly on technology vendors to meet the challenges. As Otayek of Murex says: “Institutions in Asia-Pacific are looking to develop trusted partnerships with technol-ogy providers and are expecting [technol-ogy firms] to step up and play an advisory role to help them develop a long-term technology strategy to cope with the

avalanche of regulatory changes and market transformations that are unfolding.” Next year’s Asia Risk rankings will no doubt reflect which vendors are rising to the occasion. ■

Who rules the roost?Financial institutions are having to adapt to a swathe of new rules as law-makers continue their “heavy-touch” approach to oversight and regulation. This year’s tech rankings rate the vendors in Asia that offer solutions to these requirements – with Murex once again topping the chart. Report by Clive Davidson

Provider 1 Murex2 Misys3 Calypso4 FIS5 GFI Fenics6 Moody’s Analytics7 IBM Risk Analytics8 OpenLink9= Oracle9= SAS

Overall: All categories

“Institutions in Asia-Pacific are looking to develop trusted partnerships with technology providers and are expecting [technology firms] to step up and play an advisory role to help them develop a long-term technology strategy to cope with the avalanche of regulatory changes and market transformations that are unfolding” Guy Otayek, Murex

2risk.net

Mark Bell, Calypso

Overall: Risk management

Provider1 Murex2 FIS3 Moody’s Analytics4 IBM Risk Analytics5 Misys

Overall: Derivatives pricing and risk analytics Provider 1 Murex2 Misys3 Calypso4= GFI Fenics4= Openlink

Overall: Trading systems

Provider1 Misys2 Murex3 Calypso4 FIS5 GFI Fenics

Credit (front-to-back office) Provider1 Misys2 Calypso3 Murex4 FIS5 Bloomberg

Equities (front-to-back office) Provider1 Misys2 Murex3 Calypso4 Bloomberg5 FIS

Foreign exchange (front-to-back office) Provider1 GFI Fenics2 Murex3 Misys4 Calypso5 Thomson Reuters

Interest rates (front-to-back office) Provider1 Misys2 Murex3 Calypso4 Bloomberg5 Simplex

Hybrids (front-to-back office) Provider1 Misys2 Murex3 Calypso4 FIS5 Thomson Reuters

Clearing Provider1 Calypso2 Markit3 Murex4 Misys5 FIS

Collateral management Provider1 Calypso2 FIS3 Murex4 Misys5 IBM Risk Analytics

Trading systems

Application service provider Provider1 Murex2 GFI Fenics3 Calypso4 Misys5 FIS

Data vendor Provider1 Thomson Reuters2 Bloomberg3 Murex4 Calypso5 Oracle

Implementation efficiency Provider1 Murex2 Calypso3 Misys4 FIS5 GFI Fenics

System architecture Provider1 Oracle2 SAS3 Murex4 Calypso5 Misys

After-sales service Provider1 Murex2 Calypso3 Misys4 FIS5 Thomson Reuters

Support services, data and innovation

3 risk.net September 2016

Credit risk management – CVA Provider1 Murex2 FIS3 Calypso4 Numerix5 Misys

Credit risk management (counterparty limits, collateral, netting, PFE, credit value-at-risk, etc) Provider1 FIS2 Murex3 Calypso4 Misys5 Numerix

Market risk management (price simulation, stress testing, etc) Provider1 Murex2 Misys3 FIS4 IBM Risk Analytics5 Calypso

Operational risk management Provider1 IBM Risk Analytics2 FIS3 Murex4 Misys5 Moody’s Analytics

Liquidity risk management Provider1 Murex2 Misys3 Moody’s Analytics4 FIS5 Quantitative Risk Management

Back office Provider1 FIS2 Murex3 Misys4 Calypso5 IBM Risk Analytics

Enterprise-wide risk management/ cross-risk integration Provider1 FIS2 Murex3 IBM Risk Analytics4 Moody’s Analytics5 Calypso

Economic capital calculation and management Provider1 Moody’s Analytics2 IBM Risk Analytics3 Murex4 Misys5 FIS

Regulatory capital calculation and management (e.g. Basel II, Pillar I) Provider1 Moody’s Analytics2 Murex3 IBM Risk Analytics4 Misys5 FIS

Asset and liability management Provider1 Moody’s Analytics2 FIS3 Murex4 Misys5 Quantitative Risk Management

Risk management Derivatives pricing and risk analytics

Commodities Provider1 OpenLink2 Murex3 Misys4 Bloomberg5 Triple Point Technology

Credit Provider1 Murex2 Calypso3 Misys4 FIS5 Bloomberg

Equities Provider1 Misys2 Murex3 Calypso4 FIS5 Bloomberg

Foreign exchange Provider1 GFI Fenics2 Murex3 Misys4 Wall Street Systems5 Bloomberg

Interest rates Provider1 Murex2 Calypso3 Misys4 Bloomberg5 FIS

Hybrids Provider1 Misys2 Murex3 Calypso4 FIS5 Numerix

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MUREX, VOTED OVERALL #1TOP TECHNOLOGY VENDOR

2016, 2015, 2014, 2013

THE TECHNOLOGY PARTNER OF YOUR TRANSFORMATION

THANK YOU FOR VOTING MUREX THE #1 OVERALL RISK AND TECHNOLOGY PROVIDER THE LAST FOUR YEARS RUNNING.

Murex is committed to providing the most cutting-edge technology in capital markets risk management. This has been acknowledged by your vote as overall #1 Risk Management

and overall #1 Derivatives Pricing and Risk Analytics.

If you haven’t already experienced the Murex MX.3 platform, contact us today to set up a demo: info@murex.com