SIX Financial Information has teamed up with swissQuant Group to deliver a portfolio risk management service for private banks and asset managers facing increasing regulatory requirements around risk reporting. The service is called ImpaQt and combines SIX Financial Information reference data and market data history with swissQuant’s proprietary calculation engine to provide on-demand quantitative risk analyses of client portfolios and portfolio-based pre-trade suitability simulations.
According to Harald Rudolph, senior product manager at SIX Financial Information, “Increasing regulation means private banks need in-depth knowledge of the risk contained in their clients’ portfolios. Given that risk analysis is highly dependent on quality input data, it was a natural process to bring together SIX Financial Information’s reference data universe and market data history with swissQuant’s risk and software know-how.”
While the core components of ImpaQt already exist, the companies are working to create an off-the-shelf service and technical architecture that can be rapidly implemented while ensuring no client data leaves the bank. Essentially, by pre-calculating a bank’s holdings and its potential universe of investments at an instrument and risk factor level overnight, the service can push risk figures to the bank, allowing the risk of any potential changes to a portfolio to be simulated in real time.
Florian Herzog, CEO of swissQuant Group, says: “The architecture of ImpaQt minimises the work the bank must do. We take care of reference data, the calculation models and interfaces, and the bank can use ImpaQt as a service to simulate changes to its portfolios and see the associated risk.”
The companies plan to make the service available in October 2013 to banks in Switzerland that face increasing risk reporting requirements as a result of regulation such as the Federal Financial Services Act. They will then focus on wider European markets challenged by regulation such as MiFID II with a view to extending the geographic reach of the service next year.