Fully integrated with ARZâs private banking platform TripleâA Plus, this powerful new risk management application provides ARZ member banks with detailed market risk analytics for portfolios and strategies. It empowers portfolio managers and client advisors with practical information to help them drive the investment process, control the associated risks and deliver risk-adjusted advice, which in turn enables their clients to optimise their risk/return objectives and constraints.
As an IT services supplier ARZ centrally hosts applications for around 70 retail and private banks in Austria which can be accessed over the intranet. Mag. Markus Hammerl, Product Manager, ARZ comments: âBy extending our relationship with Temenos, we have been able to expand our private banking services to respond to the increasing demand from our banks for risk analysis and optimisation functionality, which is now available on a cost-effective Software as a Service SaaS/ASP basis. In the aftermath of the financial crisis, private banks are facing increased competition, many emerging regulations and increasingly sophisticated and demanding customers. Wealthy investors in particular are demanding more specialised investment advice and risk-adjusted portfolio management including scenario analysis.â
TripleâA Plusâ portfolio risk module includes industry standard risk statistics such as Value at Risk (VaR), Sharpe, Beta and Treynor risk ratios, as well as tools for stress and back testing, what-if analysis, risk contribution analysis, wealth projection and portfolio optimisation support. All these features enable portfolio managers to automatically monitor portfolio risk thresholds and simulate position modifications or changes of price/risk factors in an intuitive drag and drop graphic. The built in risk statistics are recalculated at the same time, which allows them to ascertain the trade-off between risk and expected return and ultimately be better able to anticipate and manage risk. The portfolio optimisation tool lets them create effective or optimal portfolios while respecting their clientâs investment profile.
Johannes Rosenstatter, Head of Asset Management, Bankhaus SpÃ¤ngler, an ARZ member bank, adds: âWe are the first ARZ member bank to exploit the advanced functionality of TripleâA Plusâ portfolio risk module and we are extremely happy with our choice. It contains best-of-breed portfolio risk analytics which enable us to effectively monitor and manage risk for our clients in a proactive and automated manner. The what-if simulation and the portfolio optimisation tool are most important for us. Our risk management can quickly grasp how sensitive a portfolio is to market fluctuations and provide our Asset Management and its clients with more in-depth information about the inherent risks and the trade-off between risk and return.â
As a fully packaged solution, the portfolio risk module can be implemented very quickly in any version of TripleâA Plus. The module is fully developed in Java J2EE and Ajax and provides a dynamic and easy-to-use web interface.
Jean-Michel Hilsenkopf, Managing Director, Temenos Private Wealth Management comments: âTodayâs high net worth investors are much more engaged in their financial affairs. They not only require a quantified measure of risk, they also need a breakdown of the source and nature of risk exposure. Private clients are seeking more practical information on how portfolio risk materialises, how correlations affect their portfolios and to what degree diversification and optimisation can reduce risk. We are pleased to provide ARZ with a functionally rich and fully integrated risk management toolkit which enables them to respond to these emerging requirements in a fast and cost-effective way.â