Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Risk Management

02:04 PM
Connect Directly

New Risk Vendors Bet Big on SIA Tech Show

Financial institutions aren't the only ones managing their risk when it comes to market activity. Nascent risk-management vendors are also hedging their bets at this year's SIA Technology Management Conference & Exhibit by seeking out new clients.

Financial institutions aren't the only ones managing their risk when it comes to market activity. Nascent risk-management vendors are also hedging their bets at this year's SIA Technology Management Conference & Exhibit by seeking out new clients.

More than 30 new names grace the risk-management field at this year's conference, providing a range of traditional solutions, from credit, market and operational-risk assessment, to the not-so-traditional, such as companies plugging compliance tools for e-mail and instant messaging. It's a testament to issues like Basel II and the need for better compliance to fend off regulators.

While stalwarts like Barra, Inc. (booth #3616), Asset Control Systems Inc. (booth #3127) and SunGard (booths #2411 and #2609) have returned for another kick at the financial-institution cat, gone from the risk-management category are the likes of Basis100 Capital Markets Solutions and Quant Trading Inc.

Others, such as Summit Systems, Inc. (booth #4201) are back after a multi-year hiatus. Allen Whipple, managing director for Summit in North America, says a tougher economic climate combined with new products to plug means that Summit is looking for "added visibility."The firm provides a range of solutions to manage credit, market and trade-margin risk, with a focus on tier-one and tier-two banks "They're the mainstay of our client base."

Whipple says, "We have signed a lot of contracts in the last 12 months. However, with the economic downturn, banks are being incredibly cautious spending money."

He says the trend is for firms to consolidate their risk-management tools on a common infrastructure to "get economies of scale." That, says Whipple, bodes well for a firm like Summit, which claims to have an integrated offering from the front to back office.

He notes that the Basel II Accord is driving a lot of risk-management decisions. "It's bringing the integration of credit and market risk to the forefront."

Increasing his firm's profile is also the goal of Olivier Vinciguerra, North America development director for Sophis (booth #1806), a France-based firm that provides integrated portfolio- and risk-management solutions for buy- and sell-side firms.

It's the first appearance at the show for Sophis, which recently broke into the North American market, and, so far, it's paying dividends. The company kicked off the conference by announcing it had signed on Alexandra Investment Management, a hedge-fund advisor with $950 million under management.

Alexandra will use Value, a portfolio- and risk-management solution for investment managers, to access real-time data and run profit-and-loss calculations and analysis.

Sophis, which has a strong European clientele also offers Risque, a portfolio- and risk-management tool for investment banks. "It's a pretty old show," Vinciguerra says of the conference and his firm's decision to showcase its products here. "We're expanding activities in the U.S. and just arrived in New York at the beginning of the year. We're looking to go into the bank and hedge-fund market. We need to improve our visibility."

Another booth newcomer is Moody's Investors Services (booth #4606). Jacqueline Homan, vice president and senior product strategist, says that in the past the firm has attended as a guest, "We haven't actually had a booth before."

The launch of new products in the past two years prompted the firm to invest in its own booth at this year's show. "It's not the kind of thing we typically do," says Homan.

The firm has a range of risk-management and analytic tools, including Moody's Default Risk Service, which tracks and projects default and recovery rates and a credit-risk calculator. It's also demonstrating an interactive ratings service, one of its newer products. "As we develop more new products, this is a venue we want to continue to go to," she says.

An hour into the show, Dilip Kumar is pleased with what he sees as a number of visitors have stopped by his booth. Kumar, a partner in the assurance and risk-advisory-business services at Ernst & Young (booth #4004), says, "There's a lot of interest in risk management by financial institutions."

With more than 450 professionals at E&Y focused on risk management, Kumar says the SIA was a good "place to showcase our services." Because the firm has a large presence in the tier-one-bank market, Kumar says he's on the hunt for clients in the tier-two range and smaller asset and investment managers. The SIA Tech Show, he says, is the place to find them.

The fact that this is the industry's largest tech show in North America is what has also attracted Brokerage Operation Control System (booth #2214), a Los Angeles-based maker of turnkey-brokerage solutions. David Kan, marketing director for BOCS, says it was a good place to highlight the firm's offering. BOCS's technology has been around for about eight years and its proprietary technology, used by some hedge funds, is now being made available to a broader market. Kan says it has "beta versions running with several broker/dealers."

The solution is an integrated front-to-back-office brokerage-trading system that features a range of tools from order entry and execution to data analytics. At $4,000 for a standard 8X10 booth, Kan says the show is "not a big investment for us," compared to the millions the firm has spent developing its technology. "We basically want to establish more contact and get more leads. We're still looking for a few medium-sized and a couple of small-sized institutions to get more beta testing."

Register for Wall Street & Technology Newsletters
Inside Abel Noser's Trading Floor
Inside Abel Noser's Trading Floor
Advanced Trading takes you on an exclusive tour of Abel Noser's New York trading floor, where the agency broker known for transaction cost analysis, is customizing algorithms for the buy side, while growing its fixed income trading and transitions business.