Asset Control is gaining traction with the ACX cloud-based data delivery, storage and analytics platform it released late last year to manage increasing data volumes, reduce infrastructure costs, and provide business and technical users access to data exploration. On the sell-side, clients are using the platform for market risk applications including compliance with Fundamental Review of the Trading Book (FRTB) regulation. On the buy-side, the platform is lending itself well to linking traditional reference and pricing data with increasingly desirable alternative data.To find out more about Asset Control’s plans for the coming year, which also include the introduction of data lineage and managed services across its product line, we talked to CEO Mark Hepsworth.
Hepsworth says the ACX client base is spread across the sell-side and buy-side, although 60% is in the company’s traditional sell-side market at the moment. FRTB compliance, including its many calculations, is a key driver of ACX adoption, with a number of clients working on FRTB initiatives. The regulation is also a sweet spot for ACX as its NoSQL infrastructure means the platform can hold huge quantities of data that can be moved around easily and are continuously available. Its placement in the cloud makes it cost effective. One client using the platform has numerous apps, some of which use machine learning. The client is looking at how to use these apps to increase efficiency and initially plans to use machine learning to reduce human bias when creating proxy market data points.
On the buy-side, the capabilities of NoSQL technology to handle unstructured data and scale as required make ACX a good match for managing alternative data. Hepsworth comments: “Buy-side clients want to see validated reference and pricing data and alternative data in one place. ACX can support this.”
The platform is hosted in the Google and Amazon Web Services (AWS) clouds and could move additionally into the Microsoft Azure environment depending on client demand. The platform’s technology stack is predominantly open source, although the end product is not open source, and includes the Cassandra highly scalable NoSQL database, Spark programming framework, and native integration with Python and R. Alongside ACX is AC Publisher, which uses kafka messaging software for real-time data streaming.
The combination of Spark, Python and R responds to client interest in bringing models to data, rather than moving large amounts of data to models. Hepsworth says: “When data is distributed, lots of data management silos appear where users have set up data siloes to meet their particular requirements. This is not efficient. Binging users to a central data store and tools, rather like a sandbox, allows them to manipulate data for activities such as idea generation, model creation and quant analysis.”
On this basis, and as an infrastructure solution with an accessible user interface and ability to pull data into workflows, ACX is also designed for data discovery. Risk managers can access and move data including historical time series data efficiently, quants and strategists can interrogate data, and business users can discover and manipulate data.
Asset Control’s data lineage development is also a response to client demand and the requirements of FRTB and the Targeted Review of Internal Models (TRIM), an initiative of the European Central Bank (ECB) that is designed to assess whether the internal risk assessment models used by banks supervised by the ECB comply with regulatory requirements and whether their results are reliable and comparable.
The data lineage solution will track market data and reference data, and will span the company’s AC Select market data acquisition, AC Plus data mastering, and AC Connect data mart and distribution platforms, the latter of which includes AC Publisher, ACX and open integration. The development is on track to deliver a complete data lineage solution in mid-2019.
Also new this year are managed services covering AC Plus and ACX. Hepsworth explains: “AC Plus has mostly been deployed on premise, but going forward clients of both AC Plus and ACX will have choice. They can run the software, or we can run and maintain it for them. We also offer third-party database support where customers are running Asset Control products on third-party database solutions.” The managed services offer is expected to appeal to some existing clients as well as new clients, primarily Tier 2 and Tier 3, but sometimes Tier 1 organisations across the sell-side and buy-side. One client is rolling out the company’s managed services, while others are in the pipeline.
Among the company’s early customer wins in 2019 is Venerable, an owner and manager of legacy variable annuity blocks that has selected Asset Control to evaluate risks and returns for investors. Venerable will use the AC Plus time series management solution to source pricing data, validate and enhance quality via user-defined workflows, and derive curves and surfaces to value its customers’ annuities portfolios.
Venerable handles the annuity needs of different client segments with various investment profiles. Asset Control’s solutions offer the data management technology that helps Venerable with the valuation, risk management and reporting requirements stemming from these client requirements. Thomas Hanson, chief risk officer at Venerable, comments: “We are constantly looking for new technology and ways to meet our unique business demands. We know that as our business evolves, we can rely on Asset Control to handle our changing needs and look forward to deploying its solutions in 2019.”