SunGard has introduced a hosted risk management service based on the APT risk engine that has been deployed by many of its institutional buy-side clients. The so-called APT Enterprise platform embeds the risk engine and market data in a single, accessible data repository and offers users an interactive dashboard and browser-based delivery.
APT Enterprise was developed by SunGard in partnership with a large asset manager, which is already using the service, and covers multiple asset classes including liquid and illiquid assets, unlisted funds and most derivative products. The aim is to provide a single view of market and liquidity risk, improve workflows for market data management and support regulatory compliance.
Laurence Wormald, head of buy-side research at SunGard, describes APT Enterprise as a multi-tenanted private cloud solution that is based on a unified risk database, which SunGard updates on a daily basis, and allows every business to have a secure and private view of its own data. He explains: “Firms are starting to develop a true culture of risk, but they are challenged by lack of coherence in modelling and by disparate risk platforms. We have moved with the times to offer a hosted, integrated view of risk that is based on a well-established methodology.”
APT Enterprise will not replace SunGard’s APT Pro desktop risk management solution or the deployed version of the APT engine, and is instead designed to work in an increasingly integrated environment that avoids the dangers of siloed risk, reduces the operational risk of sending and receiving data, and improves efficiency through the use of flexible dashboards and automated risk reports.
Wormald says: “APT Enterprise allows the monitoring of liquidity risk to become more integrated with market risk and be visualised via a front-office dashboard, helping investment firms make better informed investment decisions. It also provides simplified workflows and allows a chief risk officer to see an enterprise-wide view of risk on one screen.”
When developing APT Enterprise, SunGard turned to clients to understand the pain points of compliance with regulations including risk reporting requirements. Wormald points out that APT Enterprise is not a compliance system, but says it can provide automated reporting for AIFMD as well as for the market, credit and liquidity risk aspects of regulations such a Dodd-Frank, Form PF and Solvency II.
Six SunGard clients, including a large hedge fund and a handful of asset managers, have been using the outsourced service for at least part of their risk management and reporting requirements since it was available on pre-release early this year. Wormald expects numbers to increase gradually, but not at great speed as outsourcing risk management is a strategic decision typically made on the basis of cost and operational risk, yet sometimes hampered by reservations about issues such as security.
Looking forward, Wormald says: “Our roadmap for next year will add more scenario analysis features to APT Enterprise, including contagion models and economic scenario generators. We will also look at the technical aspects of scaling the platform.”