IBM has combined its Algo Risk Service, a cloud-based risk offering acquired with Algorithmics in 2011, with cloud managed data services to deliver IBM Algo Risk Service on Cloud, a risk analytics solution that transforms upstream and downstream data to make it available for portfolio and enterprise risk modelling.
The service is offered as a multi-asset class managed risk service on cloud and can be deployed in a variety of ways to meet user requirements. For example, the software element of the service can be installed on premise and data management can be sourced from the IBM cloud. Alternatively, data management and product modelling, including simulation and valuation, could be put in the cloud, with data aggregation and risk modelling on premise.
Dr Andrew Aziz, director of research, financial engineering and on-cloud solutions at IBM Risk Analytics, explains: “Algo Risk Service on Cloud gives clients more transparency around risk modelling. Clients have a choice of market data vendors to use with the service, but with the inclusion of data management they have greater ability to drill down into the data. Full data transformation means they can use a hybrid model in terms of where the software and data reside, but still have an accurate and transparent view of risk across the enterprise.”
In addition to Algo Risk Service on Cloud, IBM has introduced Algo Risk Service Risk & Financial Engineering Workbench on Cloud, essentially a sandbox that allows users to drill down into the risk analytics and tell IBM how they would like it to change the production environment in the IBM cloud. On this, Aziz comments: “This hybrid solution provides a balance of cost of ownership and flexibility, allowing clients to use the cloud, but also the workbench, to specify their own production set up. About a quarter of Algo Risk Service on Cloud users are evaluating the workbench to achieve more transparency and flexibility.”
In terms of cloud solutions for risk reporting, and to give clients a range of options from static to customised reports, IBM has restructured existing cloud services to deliver Algo Risk Reports on Cloud. This allows users to submit portfolios for risk analysis using an IBM risk framework and for preconfigured reports to be returned. The reports are designed to meet regulatory, investor and investment manager requirements. IBM also offers customised risk reports and active investment reports providing risk information on demand.