London… 7th December 2001. Misys International Banking Systems (Misys) has unveiled the latest version of Risk Vision, the company’s Risk Management solution, an offering which is believed to be unique. Joanne Shun, Product Management & Support Director for Misys’ Risk Management group, explains. She says, "We believe that we are the first supplier to provide a totally integrated risk management solution which delivers comprehensive support for enterprise-wide credit, market and liquidity risk management, together with global limits management. Following the Marketing Agreement signed recently with Amelia Financial Systems, we are also able to offer an operational risk capability."
She goes on to say, "The heritage of Risk Vision comes from integrating a set of 'best of breed' risk management applications. The underlying architecture has now been substantially re-engineered to deliver a flexible suite of integrated components, which can be installed together or separately. All the risk engines now operate within a single database environment, with high-speed internal engine caches, ensuring the system can utilise any of their results for risk measurement and limit setting purposes. Extensive drill-down capability allows viewing of all participating trades. This is true, seamless integration, but with the flexibility of a component architecture."
Efficient and tailored user access is a key feature of Risk Vision 5, with recent front-end development expanding the web-based capability of the product. The resulting 'thin client' screens can be implemented quickly and easily, and rolled out to users with minimum impact on client PCs. Release 5 has comprehensive web-based real time pre-deal checking and trade entry for 'what-if' simulations, which can be integrated with other existing trading systems.
Major enhancements to the real-time trade APIs (Application Program Interfaces) make trade data easily shareable between Risk Vision and source systems. Business oriented, unified APIs reside on the server, making both initial implementation of Risk Vision and future release upgrades straightforward. Parameter-based trade details, full support for ‘linked’ or compound trades, and user-definable attributes mean that the two-way APIs are able to cater for virtually all trade types in a bank, and support internal event/cashflow generation where required.
Joanne Shun points out, "The enhanced three-tier architecture means that Risk Vision can support both a global 24 x 7 capability and multi-hub configurations. This means that internationally active banks can trade through all time zones, each centre passing on limit utilisation on a rolling basis, whilst also being able to perform close of business without interrupting trading elsewhere at the end of their trading day."
Functional enhancements to Risk Vision include improvements to the system’s credit mitigation capability with unified use of netting agreements across all engines and limits, enhanced support for credit derivatives, and improved modelling of collateral portfolios and collateralisation agreements. Support for the new Basel II rating factor-based calculations is also included.
Risk Vision has also undergone substantial development in the area of advanced interest rate pricing and portfolio analysis. All market risk or credit risk results from ad hoc runs or ‘what if’
analyses can now be accessed from the comprehensive new Portfolio Risk Viewer. Extended market risk statistics can be calculated by ‘trading desk’ accurate pricing routines, which now cater for a full spectrum of complex option types, either by optimised simulation, by full historic or Monte Carlo simulation techniques.
On future enhancements to Risk Vision, Joanne Shun comments, "The architectural links established between the different components of Risk Vision now enable a comprehensive set of limits to be established and monitored in real-time, including risk statistics such as Duration and Value at Risk (VaR). The revised architecture also puts Misys in a position to deliver the next wave of enhancements, including additional methodologies, automated back-testing, and even further performance enhancements."
Joanne Shun predicts that "more and more of the balance sheet of financial institutions will come under the umbrella of risk management. The key underlying trend is that progressive financial institutions are starting to see risk bearing as a profit generating activity, and risk capacity as a resource to be effectively utilised. Risk management is no longer only about control or providing a ‘safety net’ for the institution, but is now starting to drive business decisions and underpin good management practices in all types of financial institutions.
She sums up by saying, "Misys is ideally positioned to meet this future challenge of ‘Risk-to-Value’ for risk management. We have a portfolio of flexible powerful and advanced components, which are already integrated to provide a full range of support for risk across all areas of a financial institution. Substantial and continuing investment in our risk products, together with our global architecture, ensures that we will continue to provide market-leading solutions to meet the future of risk management."