There has been an avalanche of regulation over the past several years. While firms are digging out from under it in an effort to comply, others are looking for new opportunities this environment presents.
Satyam Kancharla, chief strategy officer of Numerix, told John Lothian News’ Jim Kharouf that firms must find ways to create more efficiencies in terms of collateral management and looking at their operations in a more holistic way. The combining of OTC and futures into cleared structured environments are forcing firms to break down those trading desk silos that have been part of firms over the years.
“The front and middle office, even some elements of the back office – all of these elements are coming together into pre-trade analytics, into one set of enterprise analytics,” Kancharla said. “A lot of institutions are looking to change the technology of their analytic infrastructure and rethink how analytic infrastructure should be organized.”
Kancharla said firms are “rethinking risk, collateral management, product control, model validation and front office.”
His firm is aiming to address that through a series of products that provide independent analytics for derivatives and structured products. Numerix believes that such analytics will help banks and institutions provide structure and other assistance on complex deals across all major asset classes. Numerix’s technology also addresses hybrid trading across different asset classes.
For Kancharla its about “looking at business and trading more holistically.”
“It’s not just looking at the P&L as measured in the front office, but also looking at the capital impact, looking at the counterparty impact, funding impacts, collateral impacts,” Kancharla said. “These are real business concerns that will distinguish organizations that thrive in this new environment, versus those that will have a challenge.”