System selection
New systems account for one of the largest items of expenditure for financial institutions. It is imperative that they make the right choice, on a rational basis, and free from the inevitable biases that often pervade within organisations.
We are familiar with most of the major vendor products in the risk management, trading, and quantitative finance space. We do not, however, accept commission or other inducements from vendors to recommend their products, and clients can be sure that they will receive independent advice.
We can assist clients with system selections at different levels, from managing the entire RFP process to providing clients with subject matter expertise on specific aspects of policy or functionality. In whatever capacity we assist, clients can be sure that we will bring detailed knowledge of functionality and data requirements and a rigorous systems selection methodology. With our strategic IT partners, Net2S, we can also cover the technical IT requirements, or we can work effectively with the client’s IT department on these aspects.
Having helped select a system, we can also assist clients to implement the system – see implementation.
Client
Financial markets division of major retail and commercial bank
Region
UK
Client need
The client wished to upgrade its credit risk management system for its dealing room business. The client needed advice in respect of the required functionality and whether it should buy a vendor solution or build in-house.
Our deliverables
We initially produced a high level functional requirements document and a roadmap for how this would be delivered over the coming years. This involved helping the client to clarify its policy and methodology in a number of areas.
We produced a business case for the system which included an analysis of the build or buy options.
We identified a shortlist of potential vendors that would meet the client’s requirements and, in conjunction with the client, produced the questionnaire for the Request for Proposal and scored the responses submitted by the vendor.
We performed business analysis in relation to the implementation of the first phase of the system and wrote the functional requirements specification.
We also provided systems development and business analysis for a number of tactical systems initiatives.
Client
Wholesale banking division of large banking group
Region
UK and Benelux
Client need
The client wanted to develop its business with hedge funds but lacked the appropriate risk policies and infrastructure. It also required advice on where it could best build competitive advantage.
Our role
We first conducted a strategic review outlining the bank’s competitive advantages and current strengths and weaknesses in relation to its product offering, organisational structure, risk policy and infrastructure.
We benchmarked the bank’s hedge fund risk policies against its peers. This involved conducting interviews with key risk managers in peer institutions and also interviewing the bank’s clients to ascertain their views on the bank’s risk policies and service offering.
We identified a need for a middle office hedge fund client service function, and we oversaw the establishment of this department and defined its role and operating procedures.
We designed, built and implemented a system for cross-product reporting of hedge fund transactions. This involved the selection and parameterisation of a risk engine to pave the way for VaR based margining.
Client
Wholesale division of European banking group
Region
Benelux
Client need
The client was selecting a risk engine for the measurement of economic capital and potential future exposure for its derivatives portfolio. The client needed assistance in the selection and proof of concept process.
Our role
We assisted the client in the following areas:
- Advised on vendors to be shortlisted
- Drafting of RFI and RFP questionnaires
- Scoring of vendor responses
- Advised on test plan for proof of concept for provisionally selected vendor
Client
Retail and commercial bank
Region
Middle East
Client need
The client had undertaken a system selection for a portfolio credit risk system to analyse its portfolio and calculate economic capital. The client needed assistance in relation to the data requirements for the new system.
Our deliverables
We provided input into the technical requirements, interfacing and data requirements for the new system.
Client
US Investment bank
Region
UK
Client need
The client aimed to re-engineer its collateral management infrastructure to meet (and ultimately exceed) market best practice. The scope of this initiative covered all of the bank’s collateralised product lines (OTC derivatives, repo, securities lending, futures & options, prime brokerage) and the end-to-end collateral process – from margin management to inventory management and the pledging of collateral.
Our role
We provided:
- Advice on market best practice across all areas of the collateral management process
- Analysis of existing environment and identification of system, process and organisational shortcomings
- Advice on the strengths/weaknesses of collateral management software vendors
- Strategic advice on functional and architectural design and future state operating model.