Risk technology company Numerix’s acquisition last month of TFG Financial Systems is a first step in adding a “deeper bench of analytics” for pricing and risk to its Oneview Enterprise Platform, according to Steven O’Hanlon, CEO and president of the company.
TFG Financial Systems offers real-time risk, profit-and-loss and position management services, including dependency graph capabilities. In response to TFG’s customers, Numerix is working on using TFG’s services to provide Monte Carlo and other simulations, and pricing capabilities for structured products and other securities, adds O’Hanlon.
The Numerix Oneview Enterprise Platform includes the Oneview XVA (X-Value Adjustment, a type of valuation adjustment for derivatives) service. XVA unifies front office functions, risk systems including enterprise risk and algorithms, and Treasury systems. TFG’s real-time capabilities help aggregate positions a user may have throughout different front-end risk systems, according to James Jockle, chief marketing officer at Numerix.
Oneview includes a middle-office risk function that calculates value-at-risk. “Through our DNA — the richness of our analytics and our dedication to figuring out how to focus and build on top of the breadth of information — we have been able to satisfy front office needs, but the middle office has created a sweet spot,” says Jockle. “It’s exciting to have the TFG framework embedded into the platform that can go in many different directions. It’s a sequenced opportunity.”
Numerix sees its offering as “next generation technology” that lets firms “scale up and start making critical replacements while bringing and creating one singular view of trading and risk operations,” says Jockle. “It’s an interesting inflection point and a new opportunity in the market.”